Global IPO trends: Q3 2020
Highlights of the report show that:
- Market liquidity and investor sentiment drove deals and proceeds up year-on-year
- Technology, industrials and health care led global sector activity YTD with 537 IPOs raising US$110.5b
- Q3 2020 was the most active third quarter in last 20 years by proceeds and the second highest third quarter by deal numbers
Globally Q3 2020 bucked the traditionally slow IPO period as the markets were awash with liquidity resulting in the most active third quarter in the last 20 years by proceeds, and the second highest third quarter by deal numbers. YTD IPO activity accelerated, resulting in a 14% increase in the total number of IPOs to 872, and an impressive 43% rise in proceeds of US$165.3b. As for sectors, technology, industrials and health care once again topped the ranks.
Americas IPO activity picked up the pace in Q3 2020
IPO activity in the Americas saw 188 deals raise US$62.4b in proceeds, increasing 18% and 33%, respectively YTD. US exchanges accounted for the majority of IPOs with 82% of deals and 87% of proceeds in Q3 2020. In addition, the importance of Special Purpose Acquisition Company (SPAC) IPOs on US exchanges also rose in 2020.
Asia-Pacific IPO landscape grows stronger, window of opportunity remains open
Asia-Pacific saw 554 IPOs raise US$85.3b in proceeds, rising by 29% and 88%, respectively YTD. Activity in the region accelerated in part due to COVID-19 pandemic- related government stimulus policies, for example, employment subsidies provided to airlines in the region. In Greater China, Q3 2020 IPO activities are on track to hit historic highs with deal numbers and proceeds up 152% and 139%, respectively year-on-year.
EMEIA IPO market gains momentum to get back on track
Following a slower H1 2020, EMEIA IPO markets gained significant momentum in Q3 2020 with deal numbers increasing 34% and proceeds rising 49% compared with Q3 2019, due in part to several large IPOs in the region. The region’s big winners are those riding on the tech digitalization wave – in particular technology, industrial and health care sectors. In Europe, markets are beginning to rally, with Q3 2020 IPO numbers up 48% and proceeds increasing 51% as compared with Q3 2019.
Q4 2020 outlook
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 has learned to live with the COVID-19 pandemic and remains impacted by the unusual uncertainties of it. Globally, a divergence between economic well-being, GDP and stock market valuations may also cause anxiety among some investors. While there are some unknowns in the US-China trade tensions, the outcome of the US presidential election and uncertainties still surrounding Brexit, the outlook for Q4 remains positive with a healthy spread of deals in the pipeline across many markets.
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