Global Drop in IPOs

Richard Henderson reported this week at The Financial Times Online that, “A sharp drop in initial public offerings this year has underlined concerns about the state of public markets as fewer companies raise capital on the world’s stock markets.

“Despite surging global equity markets this year, the number of new listings fell by a fifth to 1,237, the lowest level in three years, according to Dealogic data. These companies raised a combined $188.8bn, a 10 per cent drop from 2018 and also a three-year low.

“The drop in IPOs comes at a critical juncture for public markets, which have shrunk over the past two decades, while private markets — such as private equity and venture capital — have expanded.”

The FT article explained that, “The challenges in listing in 2019 were highlighted by Uber, which has suffered a share price fall of about a third since listing in May. WeWork also sent a shudder through the listing market after aborting its IPO in September when investors soured on the company.

Listings across Europe, the Middle East and Africa suffered the sharpest fall this year. The 179 IPOs marked a 40 per cent drop from 2018 and the lowest total in seven years. The poor showing was mirrored in Asia, where the number of IPOs hit a five-year low, and the Americas, where listings sagged 15 per cent.

“The UK’s protracted exit from the EU put pressure on deals in Europe, with the number of listings on the London Stock Exchange, the region’s leading listing venue, dropping 62 per cent.”

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