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IPO prospects strong for 2017

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Excerpt: Experts believe that, although there have been problems with IPOs, 2017 will be a strong year.
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​Geopolitical uncertainty has had a significant impact on investors, but suggestions are that this will change over the next 12 months and 2017 will be a strong year for IPOs around the world.

The quarterly EY Global IPO Trends: 2016 3Q found that the first three quarters of this year have seen a period of stagnation for IPO proceeds, which were 39 per cent lower than the same period in 2015.

Deal volumes also took a hit, falling by 23 per cent. However, despite this significant slump there was quarter-by-quarter improvement. The figures found there was a 16 per cent growth between the second and third quarter of this year.

In general, performance for Q3 was strong compared to the same period 12 months previously, with Asia-Pacific experiencing particular confidence. Across the region there was a 138 per cent increase in IPO proceeds, and an impressive 41 per cent boost in deal volumes, compared to Q2.

The region's progress was so strong that Asia-Pacific alone accounted for more than two-thirds of IPOs worldwide and more than half (53 per cent) of proceeds.

China continued to be the standout performer, but was supported by significant activity in Japan, Australia and South Korea.

Dr Martin Steinbach, EY EMEIA IPO leader, attributed the poor performance in 2016 to political uncertainty surrounding Brexit and the US elections. However, it's more a matter of companies delaying their decisions rather than putting them off completely.

There are early indications that the report's predictions could be accurate, with Germany's Deutsche Bank looking to improve its asset management division and rebuild its capital buffers.

However, before it is able to do that it will need to resolve its dispute with the US Department of Justice about its sale of mortgage-backed securities.

Reports also suggest that software group Misys will soon come back to the London Stock Exchange after a number of years of private equity ownership. It's expected that the former FTSE 100 company will enter the market with a value of around £5.5 billion.

It's hoped that as the political climate around the world becomes clearer, IPO activity will be confident for the last quarter of 2016 and throughout the next year.​

Category: Industry News
Published: 19/10/2016 12:14
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