PWC – Global IPO Watch, 3Q 2023

The Global IPO Watch report by PwC for the third quarter of 2023 highlights some positive developments in the IPO markets of the US, Europe, and the Middle East. In the US, there have been successful IPOs, including the largest IPO of the year by UK-based chip designer Arm. The European IPO market has also seen activity in Germany, France, Romania, and the UK. However, China remains the leader in the global IPO market, with the highest IPO proceeds this quarter, mainly driven by the STAR market that supports local technology companies. Despite this, IPO proceeds in China have declined by more than 50% due to the slowdown in the Chinese economy. The secondary issuance market in Europe has demonstrated resilience, suggesting that there is available cash for quality issuers. The London Stock Exchange has been the leading exchange for follow-on issuance in Europe, indicating a strong investor appetite for quality names. In the Middle East, IPO markets have remained active, with a promising IPO pipeline for next year. This is due to privatisation initiatives in the region and reforms that allow foreign companies to dual list their securities on the Saudi Stock Exchange, attracting foreign capital. The report also highlights that macroeconomic factors continue to impact global equity markets. Interest rates and inflation are significant drivers, and despite expectations of central banks ending their interest rate hike campaigns, there is still uncertainty about further rate hikes due to labor market shortages and disruptions in the global supply chain. Despite these challenges, major global equity indices have traded positively as central banks aim for a soft landing for the US and Eurozone economies.