The Strategist

Thomson Reuters: Global IPO market skyrocketed in 2017

04/03/2017 - 17:00

According to Thomson Reuters, the global initial public offering (IPO) experienced a real takeoff in the first quarter of 2017. Volume of funds raised during the IPO amounted to $ 32.8 billion, which is 142% more than in the first quarter of last year. Rise of the IPO market has been recorded in all regions of the world, with the highest growth noted in the US and Latin America.

Anthony Quintano via flickr
Anthony Quintano via flickr
According to Deals Intelligence, research division of Thomson Reuters, the world’s IPO market grew almost 2.5 times, or 142% in the first quarter of the year. Compared to the last year, all companies attracted $ 13.5 billion on their initial offerings. Number for the current year reaches $ 32.8 billion. By the number of conducted IPOs, the first quarter of this year has surpassed the last almost twice - 348 placements versus 187. As for volume of proceeds, the first three months of this year have become a record quarter since 2015. Asia earned most of the money - $ 12.9 billion. This number is almost equal to volume of funds raised throughout the world in 2016. The second place by volume of all IPOs is taken by the US with $ 10.3 billion, and EMEA (Europe, Middle East, Africa) with $ 5.4 billion is in the third place.

Despite a slight lag behind the IPO market in Asia, the US market became the leader in growth dynamics. 7 IPOs held in the first quarter of last year attracted only $ 488 million in the US. This year has already brought $ 10.3 billion, an increase of 2016%. Next comes the Latin American IPO market, where growth to the previous year was 1435%, with a volume of $ 1.5 billion. Overall, all regions of the world showed simply amazing figures: in Asia it was 73%, in the EMEA region - 28.6%, in Japan - 51.2%, in Australia - 152%. 

The American IPO market grew in the first quarter largely thanks to the high-tech sector placements. The lion share of the total volume is held by company Snap, which owns Snapchat instant messenger. During the initial placement on the NYSE, held in early March, Snap earned $ 3.9 billion.

Earlier, audit and consulting company EY in its EY Global IPO Trends report quite positively evaluated the IPO market in 2017. "We expect improvements in macroeconomic indicators, higher asset valuations and lower volatility", the researchers said. Combination of these factors should significantly increase confidence in the IPO market, especially as geopolitics become more clear. Although it is difficult to say whether IPO markets will recover in 2017 to record levels of 2014, the situation should improve compared to 2015. 

Apart from that, EY specified that the situation in the European IPO market will be gradually improving throughout all 2017 "as the political situation should become clearer". "The combination of economic stability, flexible monetary policy, low interest rates and a higher valuation of assets should inspire both investors and IPO candidates", the paper’s authors believe.