Thursday 21, December 2017 by Jessica Combes

Global IPO volume hits 10-year high


Global IPO volumes in 2017 reached the highest level in a decade, according to the latest Cross-Border IPO Index (as at 4 December 2017) by global law firm Baker McKenzie.

The Middle East region also picked up with 300 per cent increase in value of domestic deals and securing the first cross-border listing in the region since 2015.

Low market volatility as a result of the relatively benign geopolitical environment and improved market sentiment were behind the increase in global IPO activity, which saw both cross-border and domestic activity grow. In total, 1,694 companies raised $206.6 billion from IPOs, a jump of around a third in both value and volume on 2016.

Cross-border activity
Cross-border deals jumped by 60 per cent in volume, growing in all regions, including Latin America, which saw its first cross-border listing in 10 years. Cross-border capital raising also grew in value in 2017 by 25 per cent, the majority of which was accounted for by a strong performance in Europe, Middle East and Africa (EMEA) and North America. That helped offset a decline in Asia Pacific cross-border capital raising.

The UAE recorded the only cross-border listing in the Middle East region, by ADES International Holding, which raised USD 243.5 million on the London Stock Exchange.

“The economic activity associated with IPOs is vital for the overall development of regional capital markets, which in turn will stimulate further growth in Arab economies,” said Mazen Boustany, Head of Banking & Finance at Baker McKenzie Habib Al Mulla in the UAE.

Middle East domestic IPO activity
On the domestic front, IPO values were up an impressive 55 per cent year on year, from $676 million to $2.1 billion in 2017, while volumes also increased by 40 per cent, from four IPOs in 2016 to 12 IPOs in 2017. The number of IPOs this year compared to 2015 climbed by 22 per cent, although capital raised fell by three per cent.  

Overall IPO activity from the Middle East (both domestic and cross-border) saw a 225 per cent increase in terms of volume and 315 per cent increase in value. The UAE and Saudi Arabia led domestic IPO activity with four listings each, followed by Oman with three and Qatar with one. The UAE had the largest share (64.4 per cent) in terms of capital raising from the region, with proceeds of $1.3 billion from its four listings. This value excludes the $851 million listing of Abu Dhabi National Oil Company for Distribution PJSC, the biggest listing on the Abu Dhabi Stock Exchange in the past decade, which was only priced on 13 December 2017.

“Stability of oil prices and the political situation will contribute to developing market penetration and enhancing liquidity. As per our recent global transactions forecast, strong economic reforms and privatisation plans in Saudi Arabia will lead to an increase in investor appetite and are likely to drive IPO activity in 2018,” said Zahi Younes, Capital Markets/M&A partner at Baker McKenzie's associated firm in Saudi Arabia.

The top sectors by volume for domestic IPOs in the region in 2017 were Financials and Energy & Power, with three listings each, and the top sector by value was the Real Estate sector, with more than $1.2 billion raised from one listing.

Regional insights

Asia Pacific
It proved a steady year for capital raising in Asia Pacific’s exchanges during 2017, with issuance totalling $92.4 billion accounting for a 13 per cent increase compared to 2016. The Cross-Border IPO Index in Asia Pacific fell by 20 per cent in 2017, as domestic deals dominated the share of new equity deals in the region and the cross-border capital raised during the year fell 24 per cent.

After a slow start, it has been a buoyant year for IPOs in EMEA in 2017 with both the volume of capital raised and the number of issuances climbing sharply. Total capital raised climbed by 55 per cent to $55.1 billion while the number of issues was up 25 per cent to 227, both following two previous years of decline.

The Cross-Border IPO Index in EMEA was one of the most promising increases in 2017, after continuous years of decline. The EMEA index increased by 93 per cent in 2017, as cross-border capital raising and the number of IPOs experienced increases, driven by the largest cross-border lPO this year, Allied Irish Banks.

North America
The North America market rebounded in 2017, shaking off the lethargy which accompanied the US election in 2016. Capital raising jumped by 108 per cent to $51.6 billion while the number of issuances increased by 112 per cent to 320.

Cross-border listings increased by 127 per cent to 59, raising a total of $9.5 billion, up 46 per cent on the year. Companies based in China were the most active cross-border issuers in North America and made up 25 of the 59.

Latin America
Capital raising in Latin America in 2017 saw $7.6 billion raised, a 781 per cent jump on the previous year. Behind the impressive growth was a surge in domestic capital raising as well as the first cross-border IPO listing in a decade valued at $426.3 million by Brazilian healthcare firm Biotoscana Investments SA.

Recovery hopes in two of the largest economies in the region–Argentina and Brazil–elicited strong investor sentiment and growth of IPO was also driven by regulatory changes in Argentina and Brazil designed to unlock economic growth.


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