EY Hanyoung "Global IPOs in Q3 Reach Highest Level in 20 Years"

EY 'Global IPO Trend Report'
Technology and Healthcare Sectors Most Active

[Asia Economy Reporter Minji Lee] The global IPO (Initial Public Offering) volume in the third quarter of this year reached the highest level in 20 years. IPOs from companies in sectors such as technology, industrials, and healthcare were particularly active.

On the 15th, global accounting and consulting firm EY Hanyoung announced the publication of the ‘EY Global IPO Trends’ Q3 report, which contains these findings.

According to EY's survey, a total of 445 IPOs were conducted worldwide in the third quarter of this year. In terms of funds raised, IPOs amounted to $95 billion (approximately 108 trillion KRW). This represents a 77% increase in the number of deals and a 138% increase in funds raised compared to Q3 2019. In terms of funds raised, this is the largest scale in the past 20 years, and in terms of the number of deals, it is the second highest in the last 20 years.

The report analyzed that abundant market liquidity and improved investor sentiment, which had been subdued due to COVID-19, gave momentum to global IPOs. On an annual basis, despite the variable of COVID-19, the IPO market this year maintained a more active atmosphere compared to previous years. From January to September 2020, the number of IPOs (872) and funds raised ($165.3 billion) increased by 14% and 43%, respectively, compared to the same period last year.

Up to the third quarter of this year, IPOs from companies in the technology, industrials, and healthcare sectors totaled 537, accounting for 62% of the total 872 IPOs. The funds raised from IPOs in these three sectors amounted to $110.5 billion, about two-thirds of the total ($165.3 billion). Technology sector IPOs alone accounted for 210 deals, raising approximately $53.9 billion. EY predicted that the U.S. presidential election and subsequent U.S.-China relations would be significant events determining the direction of the global IPO market.

By region, the Asia-Pacific region saw the most active IPO activity. Up to September, the Asia-Pacific region successfully conducted 554 IPOs, raising $85.3 billion. This represents a 29% increase in the number of deals and an 88% increase in funds raised compared to the same period last year (January to September). EY analyzed that Asia-Pacific companies are securing funds for future investments and preparing for the worsening of the COVID-19 pandemic.

The number of IPOs in China surged by 152% in the third quarter compared to the same period last year. A major factor was Chinese companies listed on U.S. stock exchanges targeting the Chinese capital market amid U.S.-China trade tensions.

In the Americas region, where IPOs on U.S. stock exchanges account for more than 80%, 188 IPOs were conducted in the first three quarters of this year, an 18% increase compared to the same period last year. Funds raised ($62.4 billion) increased by 33%.

Jung Ki-hwan, Head of Strategy and Financial Advisory at EY Hanyoung, said, “It remains to be seen whether market sentiment will fully stabilize, but if the current atmosphere continues, IPO activity is expected to remain active in the fourth quarter.”

This content was produced with the assistance of AI translation services.