When will the economy catch up with the capital markets? - Global IPO trends: Q3 2020 ey.comipo/trends #IPOreport
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
When will the economy catch up with the capital markets? Global IPO trends: Q3 2020 ey.com/ipo/trends #IPOreport
Contents
Global IPO market 3
Americas 10
Asia-Pacific 15
Europe, Middle East, India and Africa 23
Appendix 29
About this report
EY Global IPO trends report is released every quarter and looks at the IPO markets,
trends and outlook for the Americas, Asia-Pacific and EMEIA regions.
The current report provides insights, facts and figures on the IPO market for the
first nine months of 2020* and analyzes the implications for companies planning to
go public in the short and medium term.
You will find this report at the EY Global IPO website, and you can subscribe to
receive it every quarter. You can also follow the report on social media: via Twitter and
LinkedIn using #IPOreport
*The first nine months of 2020 cover completed IPOs from 1 January 2020 to
30 September 2020.
All values are US$ unless otherwise noted.
Subscribe to EY Quarterly IPO trends reports
Get the latest IPO analysis direct to your inbox.
Global
GlobalIPO
IPOtrends:
trends:Q3
Q3 2020
2020 || Page 2
Global IPO market
Liquidity fuels IPOs amidst global
GDP contraction
“
Although the market sentiments can be fragile, the scene is set
for a busy last quarter to end a turbulent 2020 that has seen
some stellar IPO performance. The US presidential election, as
well as the China-US relationship post-election, will be key
considerations in future cross-border IPO activities among the
world’s leading stock exchanges. Despite the uncertainties,
companies and sectors that have adapted and excelled in the
‘new normal’ should continue to attract IPO investors.
Paul Go
EY Global IPO Leader
Global IPO trends: Q3 2020 | Page 3
Global IPO market summary – Q3 2020
Key highlights • Other mega IPOs this quarter included Snowflake Inc., which raised US$3.9b on the
NYSE. Snowflake also became the largest company to double its price on a market debut.
• Traditionally, the third quarter has been a slow period for IPOs. This year, with On the London Main Market, THG Holdings plc (aka The Hut Group) recorded US$2.4b in
fewer people traveling, more working from home and markets awash in proceeds and was the largest IPO by a British company since the listing of Royal Mail
liquidity, the US stock markets have hit record highs and global IPO Group plc in 2013. KE Holdings Inc. raised US$2.4b on the NYSE and was the largest
activities have rebounded sharply. Chinese company to go public on a US exchange by IPO proceeds since the IPO of iQiYi,
• Q3 2020 was the most active third quarter in last 20 years by proceeds Inc. in 2018. China’s Yum China Holdings raised US$2.2b on the Hong Kong Main Market.
and the second highest third quarter by deal numbers. Exchanges around Yum China Holdings is one of eight US Foreign Private Issuers (FPI) completing its
the world posted 445 IPOs with proceeds totaling US$95.0b, which were 77% secondary listing in Hong Kong since Q4 2019, and five of these deals were completed in
and 138% higher than Q3 2019, respectively. The stellar record by proceeds September.
can be attributed to the most active August and September for IPOs in the last • Shanghai, Shenzhen and NASDAQ exchanges led by deal numbers in Q3 2020, accounting
20 years. for 54% of global IPOs. Shanghai dominated global exchanges by proceeds in Q3 2020,
• Q3 2020’s largest IPOs by proceeds was Semiconductor Manufacturing accounting for 25% of global IPO proceeds, while the NYSE and NASDAQ ranked second
International Corp., which raised US$7.5b. This is also the largest IPO on the and third (each accounting for 17%), respectively. Technology, health care and industrials
STAR Market by proceeds since its launch in July 2019. were the most active sectors on these four exchanges.
Q3 2020 comparison
Global Americas Asia-Pacific EMEIA
Number Proceeds Number Proceeds Number Proceeds Number Proceeds
▲ 77% ▲ 138% ▲ 142% ▲ 222% ▲ 71% ▲ 115% ▲ 34% ▲ 49%
500 $95.0 $100 120 $37.8 $40 350 $60 60 $10
$90 $49.7 $7.5
300 $50 50
100
400 $80
$70
$30
250
$5.1
80 $40 40
300 $39.9 $60
200 $23.1
$50 60 $20 $30 30 $5
200 $40
$11.7 150
40 $20 20
$30 100
$10
100 $20
20 $10 10
50
251 445 $10 43 104 167 286 41 55
0 $0 0 $0 0 $0 0 $0
Q3 19 Q3 20 Q3 19 Q3 20 Q3 19 Q3 20 Q3 19 Q3 20
Number of IPOs Proceeds US$b Number of IPOs Proceeds US$b Number of IPOs Proceeds US$b Number of IPOs Proceeds US$b
All values are US$ unless otherwise noted. YTD 2020 and YTD 20 refers to the first nine months of 2020 and cover completed IPOs from 1 January 2020 to 30 September 2020. Q3 2020 and Q3 20 refer to the third quarter of 2020 and cover Global IPO trends: Q3 2020 | Page 4
completed IPOs from 1 July 2020 to 30 September 2020. Data as of COB 30 September 2020.
Global IPO market summary – Year-to-date (YTD 2020)
Key highlights • By proceeds, Shanghai Stock Exchange led in YTD 2020, followed by NASDAQ and Hong
Kong stock exchanges. By deal numbers, Shanghai, NASDAQ and Shenzhen were the three
• With IPO markets roaring ahead in Q3 2020, YTD 2020 activities in the most active stock exchanges.
Americas and Asia-Pacific markets have exceeded YTD 2019 levels.
In EMEIA, YTD 2020 numbers and proceeds continue to lag behind those • YTD 2020’s largest listings included the listing of Semiconductor Manufacturing International
posted in the 2019 corresponding period. Corp. (US$7.5b) on the Shanghai STAR Market, JD.com Inc. (US$4.5b) on the Hong Kong Stock
Exchange and Beijing-Shanghai High-Speed Railway Co., Ltd. (US$4.4b) on the Shanghai Stock
• Global IPO numbers were up 14%, while proceeds rose by 43% from Exchange.
2019. Asia-Pacific saw a 29% increase by deal numbers and an 88% rise
in proceeds. The Americas also saw an uptick, with YTD 2020 numbers • Despite the US-China tensions, Chinese companies from mainland still accounted for 23 of
and proceeds up 18% and 33%, respectively. In EMEIA, deal numbers 46 cross-border IPOs inbound into the US, with total proceeds of US$8.6b. This represents
were down 27%, while funds raised dropped 24% compared with 2019. 50% of all cross-border IPO activity inbound into the US by deal numbers and exceeded the 47%
recorded in 2019.
• Technology, industrials and health care sectors dominated global
IPO activity in YTD 2020, accounting for 62% by deal numbers and • Eight US FPIs from China have completed a secondary listing on the Hong Kong Stock
67% by proceeds. Exchange since November 2019; of which two and five of these deals were completed within
the last four months, in June and September 2020, respectively.
Change on
YTD 2019
YTD comparison YTD 2019
Global Americas Asia-Pacific EMEIA
Number Proceeds Number Proceeds Number Proceeds Number Proceeds
▲ 14% ▲ 43% ▲ 18% ▲ 33% ▲ 29% ▲ 88% ▼ 27% ▼ 24%
1,000 $165.3 $180 200 $62.4 $70 600
$85.3 $90 200 $23.2 $25
180
$115.5 $160 175 $46.9 $60 500
$80
$17.6
800 $140 $70 160 $20
150
$50 140
$120 400 $60
600 125
$40
$45.4 120 $15
$100 $50
100 300 100
$80 $30 $40
400 75 80 $10
$60 200 $30
$20 60
50
200 $40 $20 40 $5
$10 100
768 872 $20 25
159 188 431 554 $10 20 178 130
0 $0 0 $0 0 $0 0 $0
YTD 2019 YTD 2020 YTD 2019 YTD 2020 YTD 2019 YTD 2020 YTD 2019 YTD 2020
Number of IPOs Proceeds US$b Number of IPOs Proceeds US$b Number of IPOs Proceeds US$b Number of IPOs Proceeds US$b
All values are US$ unless otherwise noted. YTD 2020 and YTD 20 refers to the first nine months of 2020 and cover completed IPOs from 1 January 2020 to 30 September 2020. Q3 2020 and Q3 20 refer to the third quarter of 2020 and cover Global IPO trends: Q3 2020 | Page 5
completed IPOs from 1 July 2020 to 30 September 2020. Data as of COB 30 September 2020.
Americas and Asia-Pacific are leading the advance in IPO activity
• Americas IPO activity YTD 2020 surpassed YTD
2019 activity, with deal numbers increasing 18% and Regional share by number of IPOs Regional share by IPO proceeds
proceeds by 33% due to more robust activity in the
US and Brazil markets. 10%
15%
• Asia-Pacific IPO activity increased 29% by volume 21% 23%
29% 30% 32% 29% 28%
34%
and 88% by proceeds compared with 2019. Liquidity
available from government stimulus policies, coupled
with the US-China trade tensions, have caused more 52%
Chinese companies choosing to seek primary or 63% 48%
60% 39% 45%
secondary listings on the Greater China exchanges. 59% 57% 49% 54%
• In EMEIA, IPO markets continue to be impacted by
the pandemic, as well as the US-China trade tensions,
Brexit and US presidential election uncertainties. YTD 38%
27% 29% 27%
2020 numbers fell by 27% while proceeds declined by 19% 19% 22% 17%
12% 13%
24% compared with 2019.
2016 2017 2018 2019 YTD 2020 2016 2017 2018 2019 YTD 2020
Americas Asia-Pacific EMEIA exchanges Figures may not total 100% due to rounding.
Markets YTD 2020 IPO activity
1,800 $250
Year-on-year comparison
1,600
Number of IPOs Total IPO proceeds
Global Americas Asia-Pacific EMEIA 1,400 $200
100% 88%
1,200
$150 80%
1,000
872 188 554 130 800
$100
60%
40% 29%
43%
33%
IPOs IPOs IPOs IPOs
600 14% 18%
400 20%
$50
200 0%
$165.3b $62.4b $85.3b $17.6b 0
2016 2017 2018 2019 YTD
$0 -20%
-40% -24%
Proceeds Proceeds Proceeds Proceeds -27%
2020
Number of IPOs Proceeds US$b Global Americas Asia-Pacific EMEIA
All amounts in table are in US$
All values are US$ unless otherwise noted. YTD 2020 and YTD 20 refers to the first nine months of 2020 and cover completed IPOs from 1 January 2020 to 30 September 2020. Q3 2020 and Q3 20 refer to the third quarter of 2020 and cover Global IPO trends: Q3 2020 | Page 6
completed IPOs from 1 July 2020 to 30 September 2020. Data as of COB 30 September 2020.
Cross-border capital flows have not been affected by the global trade tensions, while SPACs gain in popularity
• Private equity- (PE) and venture capital- (VC) backed
IPOs continued to account for a significant portion of YTD 2020 activity Stock Sectors IPOs
IPOs (47% YTD 2020) in the Americas. exchanges by number largest by
• Cross-border IPO activity levels have held steady Sources of IPOs by deal numbers by total proceeds of IPOs proceeds
by deal numbers and proceeds, accounting for 8% and 57% 53% 94% 96% 92% 92%
10% of global IPO activity, respectively. US exchanges
followed by HKEx were the three most active in-
bound exchanges. Greater China, Malaysia and
Singapore continued to be the top three countries of Shanghai (Main Technology Semiconductor
Board and STAR 210 IPOs Manufacturing
origin for companies seeking to conduct overseas 43% 47% 6% 4% 8% 8%
Market) International Corp.
listings. Twenty-three Chinese IPOs listed on US $53.9b
Americas Americas APAC 2019 APAC EMEIA 2019 EMEIA
$39.3b $7.5b
exchanges, while six IPOs each from Malaysia and 2019 YTD 2020 YTD 2020 YTD 2020 Technology
Singapore listed on HKEx. 180 IPOs STAR Market
Non-financial sponsor-backed PE- and/or VC-backed July
• Merging with a Special Purpose Acquisition
Corporation (SPAC) is becoming increasingly
popular as an alternate route to access public Cross-border IPOs Top countries/regions US NASDAQ Industrials JD.com, Inc.*
markets.* YTD 2020, 122 SPACs globally have been $34.1b 168 IPOs $4.5b
YTD 2020
of origin
created, totaling US$44.1b. In Q3 2020 alone, By number of IPOs outside home country 119 IPOs $23.3b Technology
proceeds from SPAC IPOs (US$32.2b) exceeded the YTD 2020 8% Hong Kong Main Board
• Greater China (26) June
2019 total proceeds (US$15.8b) by more than 100%. • Malaysia (7)
• Follow-on offerings saw a rise of 25% by deal 2019 8% • Singapore (6)
• United Kingdom (5)
numbers and 63% by proceeds in YTD 2020 (3,807 • Canada (5) Hong Kong Beijing-Shanghai
Health care
deals for US$505b), compared with 2019. YTD 2020 2018 10% (Main Board High-Speed
proceeds already surpassed full year 2019 levels, Top IPO destinations** and GEM)
159 IPOs Railway Co., Ltd.
By number of IPOs
signaling that companies are taking advantage of $27.3b $33.3b $4.4b
2017 7% • NASDAQ (38)
cheaper financing and ample liquidity to build up • Hong Kong (12) 99 IPOs Industrials
cash reserves and strengthen/repair the financial Shanghai Main Board
• NYSE (8) January
2016 6%
positions in anticipation of uncertainty of the • Australia (5)
economic recovery progress. • Singapore (3)
**IPO destinations refer to stock exchanges (main and All amounts in table are in US$
*Company is now dual-listed on US and
Percentage by number of IPOs globally junior markets). Hong Kong exchanges. Figures may not total 100% due to rounding.
*SPAC IPOs are excluded in the compilation of all statistics included in this report, except when indicated.
All values are US$ unless otherwise noted. YTD 2020 and YTD 20 refers to the first nine months of 2020 and cover completed IPOs from 1 January 2020 to 30 September 2020. Q3 2020 and Q3 20 refer to the third quarter of 2020 and cover Global IPO trends: Q3 2020 | Page 7
completed IPOs from 1 July 2020 to 30 September 2020. Data as of COB 30 September 2020.Global IPO market outlook
• Expect the unexpected in Q4 2020: With ongoing uncertainties from the pandemic, China-US through the end of the year. Despite the ongoing COVID-19 pandemic, and the economic impact it
tensions, Brexit and the upcoming US presidential election, Q4 2020 will likely bring more is having, stock market indices have reached record levels. We expect higher levels of IPO activity
volatility. around US presidential election time than in previous elections due to the strong IPO pipeline built
up during the lockdown.
• Globally, a divergence between economic well-being and GDP, and stock market valuations, are
causing anxiety among investors that there may be a bubble on the horizon (in particular, for • Asia-Pacific: IPO activity is on track to well-exceed 2019 volumes and proceeds on the back of
stocks in certain sectors that have performed exceptionally well in last quarter). This phenomenon some mega transactions completed and in progress. However, there is speculation of a slowdown
of an underlying economic (and global GDP) contraction and advancing stock market indices ahead. Depending on the outcome, the US presidential election may have a negative impact on
will be hard to sustain in the long run. At any sign of trouble, investors may look to lock in profits Asia-Pacific and global equity markets, which inevitably will affect IPO activity levels.
before they close off the year.
• EMEIA: Heading into Q4 2020, a spate of both unusual uncertainties (COVID-19 pandemic) and
• While the Chinese Government continues to move ahead with reforms to create a favorable IPO usual uncertainties (Brexit, US presidential election, US-China-EU trade tensions) are creating a
environment for investors on Chinese exchanges, the US continues to pursue actions, primarily by level of unpredictability and potential volatility. However, there is a strong pipeline of companies
way of regulatory changes and enforcement, which target Chinese companies listed on the US looking to take advantage of the IPO transaction window in Q4 2020.
exchanges. In the short term, these actions appear to have had little impact on cross-border
• Sector: Looking ahead, technology, health care and industrials will continue to be the more
inbound IPO activity, as some of these companies had made the decision to list on the US
popular investor choices, along with companies that can demonstrate resilience and adaptation to
exchanges before the current situation developed. Longer term, depending on the outcome of
the current environment, and those that have an opportunistic advantage in the new norm.
the US presidential election, we may see a slowdown in cross-border IPO activity from Chinese
Companies in sectors hard-hit by the pandemic may have to sit on the sidelines before a new
companies into the US.
window of opportunity opens for them.
• Americas: Optimism, with some fragility, in the Americas IPO markets is expected to continue
IPO activity vs. MSCI World Index
163
c
3,000 180
2,456
2,292 2,358 2,305 160
2,500 2,179 2,178 2,188 2,180 2,234 2,148 2,202
2,028 2,086 2,108 2,046 2,139
2,342
2,141
1,853
2,053
2,367
140 Since 2019, the level of IPO
2,000 120
122
132 100 activities has gradually
1,500 116 113 111
88
96
104 80
increased on the back of a
1,000 83 60
73
64 63 64 64 40 stable and advancing global
500 51
47
0
43 45 45 40 20
0
stock market index.
Jan 19
Mar 19
May 19
Sep 19
Nov 19
Jan 20
Mar 20
May 20
Sep 20
Feb 19
Apr 19
Jun 19
Jul 19
Aug 19
Dec 19
Feb 20
Apr 20
Jun 20
Jul 20
Aug 20
Oct 19
Level of MSCI Number of IPOs
*MSCI World Index is composed of more than 1,500 constituents listed on stock exchanges of various developed markets. The index includes companies from 24 developed markets such as Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Israel, Italy, Japan, the
Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom, and the United States. The index constituents are weighted on the basis of free float market capitalization. MSCI World Index is reviewed on a quarterly basis and is managed by MSCI Inc. Number of IPOs shown
on this chart excludes all deals with proceeds below US$5m.
All values are US$ unless otherwise noted. YTD 2020 and YTD 20 refers to the first nine months of 2020 and cover completed IPOs from 1 January 2020 to 30 September 2020. Q3 2020 and Q3 20 refer to the third quarter of 2020 and cover Global IPO trends: Q3 2020 | Page 8
completed IPOs from 1 July 2020 to 30 September 2020. Data as of COB 30 September 2020.Factors to consider in an IPO preparation
There are a variety of market factors that may impact investor sentiment for IPOs. Pre-IPO companies
Implications for IPO candidates should analyze how these factors may affect their business, timing and valuations.
IPO candidates looking to go public face uncertainties caused by the
continuing pandemic, underlying economic contraction and financial
market volatility. IPO candidates considering an IPO will need to:
• Be prepared to complete the IPO quicker in narrower,
and potentially shorter-notice transaction windows COVID-19
• Demonstrate resilience with battle-tested business pandemic
models and prepare for a tough business
environment in a period of global GDP contraction Equity US
market presidential
• Conduct extensive pre-marketing via virtual investor
volatility election
meetings to obtain real-time feedback and shorten
Recovery of
the roadshow durations
Oil underlying
• Prepare well with an IPO readiness assessment price economic
activities
• Adjust to more cautious IPO valuations as investors Ongoing
re-appraise their overall asset allocation Brexit global
• Consider Plan B either by way of an alternative IPO negotiation trade
process (e.g., direct listing, merger with SPAC) or tensions
alternative financing method (e.g., private capital,
debt or trade sale)
*Factors are presented in no specific order of priority.
Global IPO trends: Q3 2020 | Page 9Americas and US IPO market insights
Americas IPO activity gained momentum
in Q3 2020
“
Americas IPO activity accelerated since June; proceeds through Q3 2020 have
exceeded full year IPO proceeds not seen since 2014. September was a record-
breaking month for technology IPOs on US exchanges, with the highest
number of IPOs observed in a single month in almost two decades. The IPO
pipeline continues to build as companies plan for a public offering amidst
optimism in the markets. While the US continued to account for the majority
of IPOs, we are also seeing strong volume from Brazil’s IPO market.
Rachel Gerring
EY Americas IPO Leader
Global IPO trends: Q3 2020 | Page 10Americas IPO market highlights
• IPO activity in the Americas gained momentum through Q3 2020. Both the volume
B3 YTD 2020
and proceeds were well ahead of Q3 2019. Change on YTD 2019 20 $7
• US exchanges once again accounted for the majority of IPOs, with 82% by $6
number of deals and 87% by proceeds through Q3 2020.
18 IPOs ▲ 800%
15
10
$5
$4
$3
• In other parts of the Americas, the Brazil IPO market picked up as low interest $4.2b proceeds ▲ 269% 5 $2
$1
rates led investors to the stock market, with 13 IPOs through Q3 2020, 0
2016 2017 2018 2019 YTD 2020
$0
compared with no IPOs during Q3 2019, putting 2020 on track to be the most Number of IPOs Proceeds US$b
active year since 2007.
• Technology led by both number of IPOs and proceeds during Q3 2020, Toronto Stock Exchange (TSX) and TSX Venture Exchange
representing 35% and 46%, respectively. Health care followed, taking 34% and 17% Change on YTD 2019
25 $3.0
$2.5
by number of IPOs and proceeds respectively through Q3 2020. 4 IPOs
20
$2.0
▼ 56% 15
$1.5
10
$851m proceeds
$1.0
▲ 284% 5 $0.5
All amounts in table are in US$ 0 $0.0
YTD 2020 activity 300 $80 IPO activity of Canadian Securities Exchange is excluded.
2016 2017
Number of IPOs
2018 2019 YTD 2020
Proceeds US$b
200
Change on YTD 2019 $40
100 Mexican Stock Exchange
188 IPOs ▲ 18%
0 $0 Change on YTD 2019
10 $4
2016 2017 2018 2019 YTD 2020 8
$62.4b proceeds 2 IPOs
$3
▲ 33% Number of IPOs Proceeds US$b NA* 6
$2
4
$1.7b proceeds NA* 2 $1
Stock exchanges Sectors* IPOs 0
2016 2017 2018 2019 YTD 2020
$0
by total proceeds by number of IPOs by largest proceeds *There was no IPO activity on Mexican Stock Exchange in first nine months of 2019.
Number of IPOs Proceeds US$b
US NASDAQ Health care Snowflake Inc. September
$34.1b | 119 IPOs United States 71 IPOs | $16.9b $3.9b Technology, New York (NYSE) NASDAQ and NYSE 250 $100
New York (NYSE) Technology Royalty Pharma plc June Change on YTD 2019 200 $80
$21.4b | 31 IPOs United States 55 IPOs | $22.3b $2.5b Health care, US NASDAQ 150 IPOs ▲ 18%
150
100
$60
$40
Brazil B3 Industrials KE Holdings Inc. August
$4.2b | 18 IPOs Brazil 14 IPOs | $6.4b $2.4b Real estate, New York (NYSE)
$55.5b proceeds ▲ 25%
50
0
$20
$0
2016 2017 2018 2019 YTD 2020
*IPO activity of Canadian Securities Exchange is excluded from sector analysis. All amounts in table are in US$ Number of IPOs Proceeds US$b
All values are US$ unless otherwise noted. YTD 2020 and YTD 20 refers to the first nine months of 2020 and cover completed IPOs from 1 January 2020 to 30 September 2020. Q3 2020 and Q3 20 refer to the third quarter of 2020 and cover Global IPO trends: Q3 2020 | Page 11
completed IPOs from 1 July 2020 to 30 September 2020. Data as of COB 30 September 2020.Americas — US IPO market highlights
• US IPO activity has been rapidly rising since June. Q3 2020 has
significantly topped Q3 2019 by 124% in number of IPOs and by YTD 2020 activity Change on
YTD 2019 Sectors IPOs
182% in proceeds. by number of IPOs largest by proceeds
• Health care companies continued to dominate in Q3 2020, accounting 150 IPOs ▲ 18%
Snowflake Inc. NYSE
for 41% of the IPOs, or 35 IPOs. However, technology companies still $55.5b proceeds ▲ 25% Health care $3.9b Technology September
represented the most in proceeds, raising $16.4b, which accounted for 71 IPOs | $16.9b
50% of total proceeds in Q3 2020. 55% of IPOs are financial Royalty Pharma plc US NASDAQ
sponsor-backed $2.5b Health care June
• US exchanges remained desirable to foreign companies, attracting 22
cross-border IPOs in Q3 2020. Despite US-China trade tensions, 36% Technology KE Holdings Inc. NYSE
of these cross-border IPOs originated from China, representing 78% US NASDAQ New York (NYSE) 51 IPOs |$21.1b $2.4b Real estate August
of cross-border IPO proceeds. $34.1b $21.4b
Warner Music Group Corp. US NASDAQ
119 IPOs 31 IPOs
• There have been 18 unicorn IPOs (companies valued at above US$1b Financials $2.2b Media and entertainment June
in private markets) in YTD 2020, 12 of which launched in Q3 2020. 250 $100 6 IPOs | $3.1b Rocket Companies Inc. NYSE
200 $80 $2.1b Financials August
Outlook 150 $60 All amounts in table are in US$
• Optimism in the US IPO market continues. Despite the ongoing 100 $40
COVID-19 pandemic, the S&P 500 Index reached record highs during Q3 50 $20 Performance YTD 2020
2020, coupled with very strong first-day returns. YTD 2020 proceeds 0 $0
have already reached highs of full year levels not seen since 2014. 2016 2017 2018 2019 YTD 2020
IPO pricing and performance
• Although IPO activity in US presidential election years has historically Number of IPOs Proceeds US$b
First-day Share price performance since
US
tended to concentrate toward the first half of the year and away from markets
average return IPO (aka offer-to-current)
the election, market volatility earlier in 2020 has led to more deals Cross-border IPOs
through Q3 2020. Additionally, we can expect more IPO activity top countries/regions of origin YTD 2020 + or – indicates
+32.2% +35.9%
change compared First-day and current average returns are mean returns of issuers who started
around election time than in previous years due to the strong with offer price at IPO trading by 30 September 2020
46
Greater China
pipeline built up during the lockdown. 24 IPOs ($8.6b) Equity indices Volatility index
• SPAC activity has been quite robust in YTD 2020, with larger deals
CBOE VIX®
and higher-profile sponsors involved. As a result, many more issuers are IPOs Canada DJIA S&P 500
5 IPOs ($1.9b) 26.4 current
now considering transactions with SPACs, and not necessarily as a “Plan -2.7% +4.1% 30.5 YTD average
B” option, which was largely the case in the past. US US 17.4 10-year average
• Direct listings have also become an attractive path to the public
All amounts in table are in US$ + or – indicates change since 31 December 2019 Current index level is for 30 September 2020
market, with two listings at the end of September 2020.
All values are US$ unless otherwise noted. YTD 2020 and YTD 20 refers to the first nine months of 2020 and cover completed IPOs from 1 January 2020 to 30 September 2020. Q3 2020 and Q3 20 refer to the third quarter of 2020 and cover Global IPO trends: Q3 2020 | Page 12
completed IPOs from 1 July 2020 to 30 September 2020. Data as of COB 30 September 2020.Special Purpose Acquisition Companies (SPACs) — IPO market insight
SPACs increase in popularity as an
alternate investment option
“
SPACs continue to grow in prominence and acceptance,
proving to be a viable capital markets avenue for investors
looking to deploy capital and companies seeking liquidity.
Karim Amani
EY Americas Financial Accounting Advisory Services Transactions Leader; EY Americas SPAC Leader
Global IPO trends: Q3 2020 | Page 13US SPAC highlights
• SPAC IPOs achieved record levels with 119 SPAC IPOs raising $44.0b
during the first three quarters of 2020. YTD 2020 US SPAC IPO activity
• The importance of SPAC IPOs on US exchanges rose during 2020. YTD 2020 Change on YTD 2019
150 $50
They accounted for 49% of US IPOs in Q3 2020, compared with 37% for
119
$40
100
Q2 2020. By proceeds, SPAC IPOs were almost on par with traditional 177% $30
IPOs in Q3 2020, accounting for 49% of US IPO proceeds, compared with IPOs 50
$20
$10
35% for Q2 2020. $44.0b 326%
0
2016 2017 2018 2019 YTD 2020
$0
proceeds
• Twenty-six SPAC acquisitions were completed during YTD 2020, with a Number of SPAC IPOs Proceeds ($b)
total acquisition value of $27.8b, compared with 17 deals valued at
$12.9b during the same period last year.
SPAC IPOs by % of all US IPO activity Completed US SPAC acquisitions
• More high-profile PE sponsors and executives from well-known companies 100% 30 $30
100%
are launching SPACs, providing more credibility to SPACs. 80%
90% 84% 81% 74% 56%
80%
86% 80% 83% 79% 56% 25 $25
20 $20
• Recent SPACs are larger than in the past, enabling larger private 60% 60%
15 $15
companies to explore the SPAC path to the public markets. 40% 40%
10 $10
20% 20% 5 $5
10% 16% 19% 26% 44% 14% 20% 17% 21% 44%
• SPACs can be an effective tool for private companies to go public and 0% 0% 0 $0
access significant capital quickly and efficiently. 2016 2017 2018 2019 YTD
2020
2016 2017 2018 2019 YTD
2020
2016 2017 2018 2019 YTD 2020
Number of traditional IPOs Proceeds from traditional IPOs Number of completed SPAC acquisitions
Outlook Number of SPAC IPOs Proceeds from SPAC IPOs Total acquisition value ($b)
• Momentum continues with more SPAC IPO filings building the Selected YTD 2020 completed US SPAC acquisitions
pipeline. There were 129 new IPO filings by SPACs during Q3 2020, SPAC name Target
Deal value
Sponsor
Acquisition
US$b sector
compared with 10 filed SPACs during Q3 2019. Consumer
Mosaic Acquisition Corp. Vivint Smart Home 4.2 Fortress Investment Group LLC
products
• There are 185 active SPACs, with nearly US$60b in trust, seeking
Media and
acquisitions as of the end of September 2020. Diamond Eagle Acquisition Corp. DraftKings, Inc. 2.7 Eagle Equity Partners, LLC
entertainment
Far Point Acquisition Corporation Global Blue Group AG 2.6 Far Point LLC Financials
Graf Industrial Corp. Velodyne Lidar, Inc. 1.8 Graf Acquisition LLC, Owl Creek Industrials
Consumer
Collier Creek Holdings Utz Quality Foods 1.6 Collier Creek Partners LLC
staples
All amounts in table are in US$ Source: SPAC Research, SEC filings Figures may not total 100% due to rounding.
*SPAC
All IPOs
values arein thisunless
US$ context refer also
otherwise to ex-business
noted. YTD 2020 anddevelopment and blank
YTD 20 refers to thecheck companies
first nine but2020
months of exclude
andCapital Pool IPOs.IPOs
cover completed SPAC IPO
from 1 deal numbers
January 2020and proceeds
to 30 on this
September page
2020. Q3are excluded
2020 from
and Q3 otherto
20 refer parts of thequarter
the third Global of
IPO trends:
2020 andQ3 2020 report (pages 1-13, 16-29 and
cover Global IPO trends: Q3 2020 | Page 14
appendices).
completed All from
IPOs values1are
JulyUS$
2020unless otherwise
to 30 noted.
September YTD Data
2020. 2020as
refers to the
of COB 30 first nine months
September of 2020 and cover completed SPAC IPOs from 1 January 2020 to 130 September 2020. Data as of COB 30 September 2020.
2020.Asia-Pacific
Recent IPOs with strong performance open
the window for others
“
Robust IPO activity in Q3 2020 suggests that Asia-Pacific companies are
choosing to protect their value through capital markets in preparation for a
worst-case scenario. IPO candidates are seizing opportunities to go public to
shore up their capital base for future investments and remain resilient against
a potential next wave of the pandemic. The strong valuations seen in some of
the recently listed “new economy” companies and those not impacted by the
pandemic are giving positive signals to other potential IPO candidates looking
to complete their transactions in the quarters ahead.
Ringo Choi
EY Asia-Pacific IPO Leader
Global IPO trends: Q3 2020 | Page 15Asia-Pacific IPO market highlights
• Asia-Pacific IPO activity YTD 2020 topped YTD 2019 activity by volume (29%)
and proceeds (88%). Q3 2020 IPO activity also has well-surpassed deal
numbers (71%) and proceeds (115%) compared with Q3 2019, opening a
YTD 2020 activity
prime window of opportunity for IPO candidates to go public on Asia-Pacific YTD 2020
Change on
YTD 2019 Stock Sectors IPOs
exchanges. Some of the rise in activity can be attributed to COVID-19-related exchanges by number largest by
government stimulus policies. 554 ▲ 29% by total proceeds of IPOs proceeds
IPOs
• Due to the US-China trade tensions, and uncertainty on possible regulatory
changes, some Chinese companies already listed on US exchanges chose to be $85.3b ▲ 88%
Proceeds
dual-listed on Greater China exchanges to tap into the Chinese equities market.
Shanghai (Main Industrials Semiconductor
• In Greater China, Q3 2020 deal numbers and proceeds are up 152% and 139%, IPO activity Board and STAR 133 IPOs Manufacturing
respectively, over Q3 2019. Greater China is on pace to reach historic highs in Market) International
1,200 $120
$15.9b Corp.
deal activity not seen since the financial crisis in 2008. 1,000 $100 $39.3b
180 IPOs $7.5b
• In Japan, Q3 2020 IPO activity has risen significantly from Q3 2019. It has 800 $80 Technology
STAR Market
exceeded Q3 2019 in terms of numbers (67%), and surpassed Q3 2019 proceeds 600 $60
July
(40%). 400 $40
200 $20 Hong Kong Technology JD.com, Inc.*
• In Australia and New Zealand, IPO activity picked up in Q3 2020 as listings (Main Board
0 $0 124 IPOs $4.5b
deferred in the first half of 2020 came to the public markets. As such, Q3 2020 2016 2017 2018 2019 YTD and GEM)
IPO numbers surpassed deal numbers for the same period last year.
2020 $28.2b Technology
Number of IPOs Proceeds US$b
$27.3b Hong Kong
99 IPOs Main Board
• In ASEAN, Q3 2020 is 15% lower by deal numbers and 44% lower by proceeds June
compared with Q3 2019. Year-over-year deal numbers were 13% lower, while
proceeds were 12% higher. Q3 2020 activity
• South Korea saw its largest IPOs in Q3 2020 since 2017. SK Biopharmaceuticals Q3 2020 Change on Q3 2019 Shenzhen (Main Health care Beijing-Shanghai
Board, SME and 69 IPOs High-Speed
Co., Ltd. raised US$792m in July 2020. More sizeable IPOs in the pipeline put
expected 2020 proceeds on track to reach the last peak of 2017.
286 ▲ 71% ChiNext)
$14.8b
Railway Co., Ltd.
IPOs $11.6b $4.4b
• Technology and industrials continued to perform well in Q3 2020 by deal 115 IPOs
$49.7b
Industrials
▲ 115%
Shanghai Main Board
numbers and proceeds. While health care saw a smaller number of deals, the Proceeds January
sector continued to increase its presence in proceeds raised from the capital
markets. *Company is now dual-listed on US and
All amounts in table are in US$
Hong Kong exchanges.
All values are US$ unless otherwise noted. YTD 2020 and YTD 20 refers to the first nine months of 2020 and cover completed IPOs from 1 January 2020 to 30 September 2020. Q3 2020 and Q3 20 refer to the third quarter of 2020 and cover Global IPO trends: Q3 2020 | Page 16
completed IPOs from 1 July 2020 to 30 September 2020. Data as of COB 30 September 2020.Asia-Pacific IPO market outlook
• With some mega IPOs on the horizon, and several smaller IPOs expected to launch in Q4 2020,
technology is expected to continue to be the hot sector in Q4 2020.
c
• There is speculation of an economic slowdown ahead, as the impact of the pandemic has not been fully
felt in the economy. The US-China relations post-election may also affect the sentiment on Asia-Pacific
IPO candidates in the next six
equity and IPO markets in 2021.
months may take advantage of the
• In Greater China, positive government policies and strong IPO pipelines, including a number of highly
anticipated mega IPOs, will sustain record-level IPO activity through the rest of 2020. open IPO window to replenish their
• Strong first-day returns in selected IPOs continued to attract retail investors’ interests despite market capital base and work to ensure
volatility. they have capital on hand for the
• In Japan, the rebound in IPO activity is expected to continue through Q4 2020 and into the first half of economic slowdown ahead. Even if
2021. However, due to slower activity earlier in the year, 2020 deal numbers and proceeds may be lower valuations are not optimal, it is
than 2019. important for IPO companies to
• In Australia and New Zealand, IPOs will remain challenging for the remainder of 2020. Companies that secure their funding when the
demonstrated resilient business models during the COVID-19 pandemic, such as health and e-commerce
opportunity arises.
sectors exhibiting a strong growth story and a reason for listing, are likely to be successful in becoming
listed.
• In ASEAN, while Malaysia saw steady improvement in overall activity, in Indonesia and Thailand the
economic impact of the COVID-19 pandemic has been significant. As a result, the region may take an
extended time to recover. That said, Indonesia has one IPO in the pipeline that could raise US$500m
before the end of the year, and Thailand has several sizeable IPOs in the pipeline that could go public in
Q4 2020.
All values are US$ unless otherwise noted. YTD 2020 and YTD 20 refers to the first nine months of 2020 and cover completed IPOs from 1 January 2020 to 30 September 2020. Q3 2020 and Q3 20 refer to the third quarter of 2020 and cover Global IPO trends: Q3 2020 | Page 17
completed IPOs from 1 July 2020 to 30 September 2020. Data as of COB 30 September 2020.Asia-Pacific — Mainland China and Hong Kong IPO market insight
Strong IPO activity and mega IPOs put
Greater China on course for a record year
“
IPO activities in Greater China remained robust in Q3 2020 due
primarily to supportive government policies and the pandemic situation
under better control in China. With a strong IPO pipeline and the
prospect of some mega IPOs landing in the mainland and Hong Kong
stock exchanges, 2020 is set to be another record year for the Greater
China issuers.
Terence Ho
EY Greater China IPO Leader
Global IPO trends: Q3 2020 | Page 18Asia-Pacific — Mainland China and Hong Kong IPO market highlights
• Larger deals dominated the Hong Kong markets, as
evidenced by the 60% increase in proceeds over YTD 2020 activity
Hong Kong includes both listings on the Mainboard and Growth Enterprise Market (GEM).
Shenzhen includes listings on the Mainboard, Small and Medium Enterprise board and ChiNext. YTD 2020 top 5 IPOs
2019. Mainland China IPO activities recorded the All amounts in table are in US$.
highest nine-month proceeds in the last 20 years Hong Kong (Main Board Shanghai (Main Board Shenzhen (Main Board, IPOs
and the second highest by deal numbers, boosted by and GEM) and STAR Market)Change on SME and ChiNext) largest by proceeds .
Change on Change on
the launch of STAR Market since July 2019. YTD 2020 YTD 2019 YTD 2020 YTD 2019 YTD 2020 YTD 2019 Semiconductor
Manufacturing
• Greater China accounted for three of the top five
exchanges globally by deal numbers and proceeds
99 ▲ 3% 180 ▲ 143% 115 ▲ 117% International Corp.
IPOs IPOs IPOs
$7.5b
in Q3 2020. By sector, industrials dominated by deal
numbers (28%) in Q3 2020, technology led by $27.3b ▲ 60% $39.3b ▲ 205% $11.6b ▲ 55%
Technology
STAR Market
proceeds proceeds proceeds
proceeds (32%). July
• In Hong Kong, following reforms for companies with 250 $45 250 $45 JD.com, Inc.*
250 $20
Weighted Voting Rights (WVR) in April 2018, the $40 $40 $4.5b
trend of US-listed Chinese companies conducting 200 $35
$30
200 $35
$30
200
$15 Technology
Hong Kong Main Board
secondary listings on the HKEx has continued. Hong 150
$25
150
$25 150
June
$10
Kong also saw eight mega IPOs during YTD 2020. 100
$20
100
$20
100
$15 $15 Beijing-Shanghai High-
• In Mainland China, YTD 2020 deal numbers have 50 $10 50 $10
50
$5
Speed Railway Co., Ltd.
$5 $5
already exceeded 2019 totals. YTD 2020 proceeds 0 $0 0 $0 0 $0 $4.4b
were US$50.9b, and is within reach of the 20-year 2016 2017 2018 2019 YTD
2020
2016 2017 2018 2019 YTD
2020
2016 2017 2018 2019 YTD
2020
Industrials
annual high set in 2010 (US$61.5b). Record IPO Shanghai Main Board
Number of IPOs Proceeds US$b
January
activity in Q3 2020 can be attributed to the
introduction of the registration system for a more NetEase, Inc.*
Sectors Sectors Sectors
streamlined listing process on the ChiNext Board. by number of IPOs by number of IPOs by number of IPOs
$3.1b
Technology
Meanwhile, the STAR Market also saw the largest
Industrials Technology Industrials Hong Kong Main Board
global IPO to date in 2020. 22 IPOs | $1.4b 50 IPOs | $15.9b 46 IPOs | $4.5b June
• CRSC approval rates for IPOs on the Shanghai and Technology Industrials Technology Yum China Holdings Inc.*
Shenzhen exchanges reached 97% in Q3 2020 14 IPOs | $9.9b 47 IPOs | $9.9b 21 IPOs | $1.6b $2.2b
versus 89% in Q3 2019. Expansionary monetary Retail
Health care Health care Materials Hong Kong Main Board
policy and further roll-out of the registration-based 12 IPOs | $5.4b 34 IPOs | $6.0b 17 IPOs | $1.1b September
system to other exchanges will likely promote IPO *Company is now dual-listed on US and
Hong Kong exchanges.
activity in the coming months. All amounts in table are in US$
All values are US$ unless otherwise noted. YTD 2020 and YTD 20 refers to the first nine months of 2020 and cover completed IPOs from 1 January 2020 to 30 September 2020. Q3 2020 and Q3 20 refer to the third quarter of 2020 and cover Global IPO trends: Q3 2020 | Page 19
completed IPOs from 1 July 2020 to 30 September 2020. Data as of COB 30 September 2020.Asia-Pacific — Mainland China and Hong Kong IPO market outlook
• In Hong Kong, with US-listed Chinese companies returning to list on the Hong Kong IPO pipeline vs. June 2020
Stock Exchange and a number of mega IPOs in the pipeline, we expect the positive
IPO activity to continue through the rest of 2020.
companies are in the China
• Since the listing reforms in 2018, Hong Kong has and will continue to attract
IPO activity among technology and new economy companies. This should spur
more Chinese innovative companies to list in Hong Kong in order to expand their
214 Securities Regulatory
Commission (CSRC) pipeline
438
funding options amid global uncertainties. We expect to see a number of listings in
medical technology, FinTech, supply chain, logistics, education and sustainable
development.
• In Mainland China, strong pipelines and supportive government policies will sustain
robust IPO activity through the rest of 2020.
147 companies have submitted
public filings with HKEx 138
• As the impact of the COVID-19 pandemic has become more contained and
economic conditions are stabilizing, the Chinese Government will look to accelerate
capital market reforms. Investors consider these reforms, and the promotion of
Shenzhen’s ChiNext Board, to be positive factors for increased IPO activity in 226 companies in the
STAR pipeline* and 194
Mainland China. These actions are expected to increase investments and diversity
on Mainland China exchanges and, together with the available liquidity, should
attract more IPO activity.
• Market reforms and active government policies have opened an optimal transaction
window for IPO candidates. Chinese companies looking to go public in the next 6
354 companies in the
ChiNext pipeline** N/A
to 12 months should understand and take full advantage of these policies. IPO-
bound companies will also want to have the right governance culture in place to *The STAR Market was launched in July 2019 and the pipeline is registration-based.
promote transparency and accurate disclosures. The new IPO system places a high **Starting end of July 2020, the ChiNext’s IPO pipeline moved from approval-based to registration-based.
priority on these attributes and companies should be well prepared to avoid any
last-minute setback.
All values are US$ unless otherwise noted. YTD 2020 and YTD 20 refers to the first nine months of 2020 and cover completed IPOs from 1 January 2020 to 30 September 2020. Q3 2020 and Q3 20 refer to the third quarter of 2020 and cover Global IPO trends: Q3 2020 | Page 20
completed IPOs from 1 July 2020 to 30 September 2020. Data as of COB 30 September 2020.Asia-Pacific — Japan IPO market insight
IPO markets rebound in Q3 2020
“
In Q3 2020, Japan rebounded from the negative impact that the
COVID-19 pandemic had on the IPO markets in Q2 2020. With Japan’s
new prime minister indicating he will continue with Abenomics, and
with the new administration signaling its intent to create a new digital
agency in 2021, we expect IPO activity to continue its resurgence
through the end of the year and into the first half of 2021.
Masato Saito
EY Japan IPO Leader
Global IPO trends: Q3 2020 | Page 21Asia-Pacific — Japan IPO market highlights
• The Japanese Government’s fiscal policies have raised liquidity levels. At the same time, Japan’s
startup ecosystem is driving growth and activating IPO markets. While the COVID-19 pandemic YTD 2020 activity Sectors IPOs
had a negative impact on many sectors, including retail and consumer products, technology startups Change on by number largest by
YTD 2020
were able to seize the upside opportunities. YTD 2019 of IPOs proceeds
• IPO activity in Japan rebounded in Q3 2020 following the negative impacts of the COVID-19 54 ▲ 2%
pandemic earlier in the year. Japan exchanges saw 20 IPOs that raised US$706m in Q3 2020, a rise IPOs Technology Yukiguni
of 67% by deal numbers and 40% by proceeds compared with Q3 2019. However, while YOY
performance climbed 2% by numbers, proceeds declined by 27%.
$1.3b ▼ 27%
24 IPOs
$293m
Maitake
Co., Ltd.
proceeds
$410m
• Japan exchanges ranked 5th among the top 12 global exchanges by deal numbers in YTD 2020.
Consumer staples
• In August 2020, Japan’s Prime Minister, Shinzo Abe, resigned for health reasons. His successor, Tokyo (First Section, Tokyo (First Section)
Yoshihide Suga, has indicated he will continue to follow Abenomics, which should maintain economic Second Section) and September
stability. The new administration has also announced that it will create a new digital agency in PRO Market
2021 that will increasingly focus on digitalization. 25 $25
Consumer Forum
• At the same time, the Tokyo Stock Exchange continues its course to integrate its five markets 20 $20
products Engineering Inc.
into three markets (Prime, Standard and Growth). 15 $15
$117m
14 IPOs
10 $10
$356m Consumer products
Outlook 5 $5
Tokyo (First Section)
March
• We expect the rebound in IPO activity to continue through Q4 2020 and into the first half of 0 $0
2021. However, we estimate that the number of IPOs will be lower than 2019 as a result of COVID-19. 2016 2017 2018 2019 YTD
2020
• Japanese IPO candidates looking to complete their IPOs in the next 6 to 12 months would be wise to
JASDAQ and MOTHERS
continue to grow revenues, strengthen compliance activities and demonstrate the ability to
remain resilient and excel in the current economic environment.
90
80
$3.0
Industrials Japan
70
$2.5
6 IPOs Infrastructure
Fund Investment
60
50
$2.0
$90m Corp.
$1.5
40
30 $1.0
$62m
Energy
20
10
$0.5 PRO Market
0 $0.0 February
2016 2017 2018 2019 YTD
2020
Number of IPOs Proceeds US$b All amounts in table are in US$
All values are US$ unless otherwise noted. YTD 2020 and YTD 20 refers to the first nine months of 2020 and cover completed IPOs from 1 January 2020 to 30 September 2020. Q3 2020 and Q3 20 refer to the third quarter of 2020 and cover Global IPO trends: Q3 2020 | Page 22
completed IPOs from 1 July 2020 to 30 September 2020. Data as of COB 30 September 2020.Europe, Middle East, India and Africa
Investor sentiment improves as the IPO
ecosystem adapts to unusual uncertainties
“
EMEIA IPO activity rebounded in Q3 and IPO markets are getting back on track.
Investor sentiment is improving, supported by the IPO momentum in the
technology and health care sectors, highly liquid markets with volatility back to
normal, low-interest-rate environments and index valuation levels close to pre-
crisis levels. The IPO ecosystem learned to live with the virus and remains
impacted by the unusual uncertainties of the COVID-19 pandemic. We are
expecting IPO activity to continue to rebound in the last quarter of the year.
Dr. Martin Steinbach
EY EMEIA IPO Leader
Global IPO trends: Q3 2020 | Page 23Europe, Middle East, India and Africa IPO market highlights
• EMEIA IPO activity gained significant momentum in Q3 2020, with volumes
increasing 34% and proceeds rising 49% compared with Q3 2019, propelled by YTD 2020 activity
several sizeable IPOs. Improving investor sentiment and strong first-day returns Change on
YTD 2020
suggest that IPO markets are getting back on track. YTD 2019
Stock Sectors IPOs
• The biggest winners YTD 2020 from an IPO perspective have been companies that exchanges by number of largest by
were well-positioned to ride the rapidly accelerating wave of digitalization.
130 ▼ 27% by proceeds IPOs proceeds
IPOs
Technology companies have dominated EMEIA IPO markets. Industrials and
health care sectors have also been active by deal numbers. The top three sectors $17.6b ▼ 24% London (Main Technology JDE Peet’s NV
by proceeds were financials, technology and consumer staples issuers who took proceeds
Market and 31 IPOs $2.9b
advantage of the open IPO window in Q3 2020. AIM)
$3.3b Consumer staples
• EMEIA accounted for two of the top ten exchanges by deal numbers in YTD 2020: Main markets $7.0b Euronext (Amsterdam)
Indian exchanges and NASDAQ OMX. EMEIA saw three exchanges among the top ten 250 $80 9 IPOs May
by proceeds: London, Euronext and Indian exchanges. 200
$60
• In Europe, markets are beginning to rally, with IPO numbers up 48% and proceeds Euronext and Industrials THG Holdings
150
increasing 51% as compared with Q3 2019. Siemens Energy launched a spin-off IPO $40
Alternext 21 IPOs plc
combined with a direct listing. Although there were no proceeds, this large-cap (Amsterdam, $2.4b
100
Brussels, $1.0b
transaction set a tone of increasingly positive investor sentiment in the European $20 Technology
50 Paris)
market. London (Main Market)
0 $0
$3.2b September
• In the UK, IPO activity roared back to life with the mega IPO of online retailer, THG 2016 2017 2018 2019 YTD 7 IPOs
2020
Holdings plc (aka The Hut Group), which raised US$2.4b. This listing demonstrates
that there is a large amount of liquidity available and international investors are Junior markets
hungry for the right IPOs. 350 $7.0
India National Health care China Pacific
• In the Middle East and North Africa (MENA), the Saudi market posted one IPO 300 $6.0
(NSE and SME) 19 IPOs Insurance
which raised US$116m in Q3 2020, with more in the pipeline. The Tel Aviv Stock 250 $5.0
and Bombay (Group) Co.,
(BSE and SME)
$1.6b Ltd.*
Exchange saw six IPOs with total proceeds of US$357m in Q3 2020. 200 $4.0
150 $3.0 $2.3b $2.0b
• In India, there were eight IPOs on India’s Bombay and National Stock Exchanges in
Q3 2020, versus 12 IPOs at this time last year. Although IPO activity remains
100 $2.0
24 IPOs Financials
50 $1.0 London (Main Market)
subdued, pipelines are strong and there has been a strong investment appetite for 0 $0.0
June
recent IPOs, reflected by their higher oversubscription levels by institutional and 2016 2017 2018 2019 YTD
2020
retail investors. *Company is listed on the London Main Market via
Shanghai-London Stock Connect program.
All amounts in table are in US$
Number of IPOs Proceeds US$b
All values are US$ unless otherwise noted. YTD 2020 and YTD 20 refers to the first nine months of 2020 and cover completed IPOs from 1 January 2020 to 30 September 2020. Q3 2020 and Q3 20 refer to the third quarter of 2020 and cover Global IPO trends: Q3 2020 | Page 24
completed IPOs from 1 July 2020 to 30 September 2020. Data as of COB 30 September 2020.Europe, Middle East, India and Africa IPO market outlook
Europe IPO snapshot
• Looking ahead, there are questions about whether there is a
disconnect between the real economy and the stock markets. Even as Markets Activity YTD 2020
stock markets rally to new highs, many companies continue to
chart a course for resilience rather than resurgence. Change on Change on Sectors
YTD 2020 YTD 2019 YTD 2020 YTD 2019 by number of IPOs
• Unusual uncertainties relating to the COVID-19 pandemic – uneven
economic recovery rates across countries and sectors, and the 84 ▼ 19% $13.8b ▼ 28% Technology 26 IPOs | $3.2b
specter of a second wave of infections – create a level of IPOs proceeds
Health care 16 IPOs | $0.9b
unpredictability as we head into Q4 2020. However, cautiously 11% of IPOs are 27% of IPO proceeds are
positive sentiment suggests rebounding IPO activity levels over financial sponsor-backed financial sponsor-backed Industrials 12 IPOs | $0.9b
the next six months. All amounts in table are in US$
IPOs
• Companies that have accelerated their digital transformation largest by proceeds
agenda and addressed supply chain issues and other disruptions Main markets Junior markets JDE Peet‘s NV Euronext (Amsterdam)
stemming from the pandemic will continue to be the “investor
YTD 2020
Change on
YTD 2020
Change on $2.9b Consumer staples May
darlings” of EMEIA IPO markets. Traditional companies that are not YTD 2019 YTD 2019
ready for digitalization and are continuing to recover from the initial THG Holdings plc London (Main Market)
crisis may find themselves sitting on the sidelines.
44 ▲
6% 40 ▼ 30% $2.4b Technology September
IPOs IPOs
China Pacific Insurance (Group) Co., Ltd.*
• In Europe, improving investor sentiment and a healthy IPO pipeline,
including a host of scale-up and unicorn companies that were able to $13.2b ▼ 28% $0.6b ▼ 31% $2.0b Financials London (Main Market)
June
proceeds proceeds
raise notable amounts of new funds at the height of the pandemic,
should help to propel a more active IPO market in Q4 2020 and into
160 $70
160 $6 Stock exchanges
by total proceeds
the first half of 2021. Uncertainties from Brexit, the US presidential 140 $60 140
$5
election and US-China trade tensions will continue to influence 120
$50 120 London (Main Market and AIM)
$4 $7.0b | 9 IPOs UK
investor sentiment and transaction timing of IPO-bound companies in 100
$40
100
Q4 2020. 80
$30
80 $3 Euronext and Alternext (Amsterdam,
60 60 Paris, Brussels) Netherlands, France,
$2
40
$20
40 $3.2b | 7 IPOs Belgium
$10 $1
20 20
Oslo Bors and Axess
0 $0 0 $0
$1.1b | 16 IPOs Norway
2016 2017 2018 2019 YTD 2016 2017 2018 2019 YTD
2020 2020
*Company is listed on the London
Main Market via Shanghai-London
Number of IPOs Proceeds US$b Stock Connect program. All amounts in table are in US$
All values are US$ unless otherwise noted. YTD 2020 and YTD 20 refers to the first nine months of 2020 and cover completed IPOs from 1 January 2020 to 30 September 2020. Q3 2020 and Q3 20 refer to the third quarter of 2020 and cover Global IPO trends: Q3 2020 | Page 25
completed IPOs from 1 July 2020 to 30 September 2020. Data as of COB 30 September 2020.Europe, Middle East, India and Africa IPO market outlook
• In the UK, we expect to see more activity in October 2020 as IPO candidates try to complete their
offering before the US presidential election in early November 2020. Overall, healthy pipelines suggest a
more active Q4 2020 and 2021.
c
• In MENA, an increase of activity in Q3 2020 combined with more IPOs in the pipeline in Saudi Arabia, IPO-bound companies should
the United Arab Emirates (UAE) and Jordan indicate rebounding IPO activity for MENA companies in the
months ahead.
evaluate IPO de-risking strategies,
including alternative paths to
• In India, successful IPOs since March 2020 have already brought a change in sentiment to the current
IPO market. Despite ongoing uncertainties and volatility, well-prepared companies in the right sectors public markets, to manage the
and with the right business models will find the right window of opportunity in Q4 2020. unusual uncertainty and volatility
• Overall, EMEIA IPO-bound companies that are well-prepared, have adapted their equity story for a ahead.
virtual investor world and can demonstrate either opportunistic advantages or resilience in the
current environment will benefit from a strong investor appetite for high-quality IPOs in a low-interest-
rate, low-return environment.
• Nevertheless, IPO-bound companies should have their “Plan B” ready. A merger with a Special
Purpose Acquisition Corporations (SPACs) and direct listings are two options that continue to gain
momentum as companies considering an IPO weigh the advantages of alternative routes to the
public market.
All values are US$ unless otherwise noted. YTD 2020 and YTD 20 refers to the first nine months of 2020 and cover completed IPOs from 1 January 2020 to 30 September 2020. Q3 2020 and Q3 20 refer to the third quarter of 2020 and cover Global IPO trends: Q3 2020 | Page 26
completed IPOs from 1 July 2020 to 30 September 2020. Data as of COB 30 September 2020.EMEIA — UK IPO market insight
UK IPO markets recover, opening a
window of opportunity for IPO candidates
“
With the largest IPO in more than three years coming to market in Q3 2020, UK
IPO markets rebounded from the negative impacts of the COVID-19 pandemic
earlier in the year. With renewed investor confidence, companies have a prime
window of opportunity to go public. However, they will need to hurry if they
want to beat the volatility that may accompany the US presidential election in
November and a potential second wave of the COVID-19 pandemic.
Scott McCubbin
EY UK&I IPO Leader
Global IPO trends: Q3 2020 | Page 27EMEIA — UK IPO market highlights
• UK IPO markets came back to life following a lackluster Q2 2020 with the mega
IPO of online retailer THG Holdings plc in September 2020. THG Holdings plc, which YTD 2020 activity
raised US$2.4b, was the largest IPO by proceeds since Allied Irish Banks plc (US$3.8b) Change on YTD 2019 Sectors
by number of IPOs
in June 2017. This is also the largest IPO by a British company since the Royal Mail plc 9 IPOs ▼ 50%
listing in 2013 (US$3.2b). Technology 2 IPOs | $2.5b
$7b proceeds ▲ 1%
• The THG Holdings plc IPO demonstrates that there is a large amount of liquidity
available and investors are hungry for the right IPOs. With a pipeline of pent-up 33% of IPOs are financial Energy 2 IPOs | $2.3b
sponsor-backed
demand from Q2 2020, we are beginning to see more IPOs coming to the public Consumer products 2 IPOs | $134m
markets.
• Although uncertainty remains about COVID-19 and the possibility of a second wave of
London Main Market London AIM IPOs
lockdowns, much of the volatility around the “Brexit effect” has been absorbed by the largest by proceeds
market. As such, investors and IPO-bound companies are ready to move forward. $6.7b $323m
4 IPOs 5 IPOs
THG Holdings plc
• No one sector dominated in Q3 2020. Instead, the focus centered on opportunistic
$2.4b Technology London (Main Market) September
IPOs, such as THG Holdings plc, which has traded well through the pandemic as 80 16
consumers sought to do more of their shopping online. 70 14
China Pacific Insurance (Group) Co., Ltd.*
60 12
Outlook 50
40
10
8
$2.0b Financials London (Main Market) June
• Looking ahead, the UK IPO market appears to be back in business. Healthy IPO 30 6
China Yangtze Power Co., Ltd.*
20 4
pipelines suggest an active Q4 2020 and into the first half of 2021. In particular, we 10 2
$1.8b Energy London (Main Market) September
expect to see more activity in October 2020 as IPO candidates try to complete their 0 0
transaction before the US presidential election in early November 2020 and the 2016 2017 2018 2019 YTD 2020 *Company is listed on the London Main Market via
Shanghai-London Stock Connect program.
potential volatility that may create. Number of IPOs Proceeds US$b
All amounts in table are in US$
• Additional volatility may be expected from the UK-EU trade negotiations and a
second wave of the pandemic. However, companies that are well-prepared and can
demonstrate resilience will still find investors.
• IPO candidates should be well prepared, have a good equity story that highlights either Cross-border issuers from the Middle East and elsewhere
the opportunistic advantage or the company’s ability to weather whatever volatility lies remain interested in listing on UK exchanges.
ahead, and know how to tell their story to a virtual investor audience. Managing
investor education is key. Investors will ask how robust the company’s business
model is in a worst-case scenario. IPO candidates must have a strong and transparent
response.
All values are US$ unless otherwise noted. YTD 2020 and YTD 20 refers to the first nine months of 2020 and cover completed IPOs from 1 January 2020 to 30 September 2020. Q3 2020 and Q3 20 refer to the third quarter of 2020 and cover Global IPO trends: Q3 2020 | Page 28
completed IPOs from 1 July 2020 to 30 September 2020. Data as of COB 30 September 2020.You can also read
