Global IPO market down, including Phl

Initial public offerings (IPOs) across the globe have slowed down due to geopolitical trade tensions between the US and China and between the US and the European Union.

This is according to a recent EY quarterly report titled “Global IPO trends Third Quarter 2019.” EY is a member firm of Ernst & Young Global Limited.

Dolmar Montañez, SGV partner for Capital Markets, said in the Philippines alone only one company listed in the stock market, referring to the P344 million IPO of Kepwealth Property Philippines.

“In the Philippines, only one company completed an IPO as of the third quarter, while two additional deals were completed in October with total proceeds of approximately $425.9 million.”

Moving forward, Montañez said IPO activity in the Philippines is expected to pick up with about 10 additional deals likely to be completed within the fourth quarter, subject to securing green light from the regulators and overall market conditions.

“If completed, 2019 will be an improvement from last year where Philippines saw only one listing with proceeds of approximately $159 million.”

IPOs in the pipeline in the Philippines include CalComp Technology, which is planning a P9.286 billion listing, Fruitas Holdings Inc. which is planning to raise P1.2 billion, and technology company AudioWav Media Inc.

In the report, EY said “the backlog of high-quality IPOs continues to grow as issuers await more favorable market conditions, pushing IPO activity down across many markets in the third quarter of 2019 compared with third quarter of 2018.”

Overall, 256 IPOs came to the market in the third quarter with total proceeds of $40.2 billion.

This was significantly lower by 24 percent by volume and 22 percent by proceeds compared to the third quarter of 2018.

“The first nine months of 2019 saw a decline of 26 percent by deal volume (768 IPOs) and a 25 percent drop in funds raised ($114.1 billion) versus year to date 2018,” the report said.

Paul Go, EY Global IPO leader said a quiet third quarter, combined with persistent geopolitical uncertainties, has led to tepid third-quarter results across global IPO markets.

“Elsewhere around the world, the backlog of some larger IPO issuers waiting for the winds to change continues to grow. As we enter into the traditional peak IPO season, we expect global IPO activity to pick up in the last quarter and into 2020 when there is more clarity to US-China trade tensions and developments around Brexit,” he said.

In Asia-Pacific, year to date 2019 IPO volume was down nine percent and proceeds decreased by 27 percent compared to the same period in 2018.

“Ongoing trade tensions between China and the US continue to impact IPO activity across parts of the region,” it said.