IPOS hit by uncertainty as values reduced by one-fifth

BREXIT and wider volatility pushed European IPO (initial public offering) values down a fifth as markets “hit pause”, according to PWC.

European IPO proceeds will end the year about 20 per cent lower than 2017 values, with volumes also down 20%, PWC said.

London Stock Exchange and the German Dax are at similar levels of issuing IPOS by value at €10.7 billion and €10.5bn respectively, but London remains Europe’s most active market with 75 IPOS, against 16 on the Dax.

The financials sector dominated UK activity and accounted for more than half of UK volumes and almost half of values, PWC said.

The fall in activity is starkest on the BME, Borsa Italiana and Euronext exchanges, where values have decreased by 80%, 65% and 53% respectively.

IPO proceeds on the top two exchanges for 2018, the Deutsche Borse and London Stock Exchange, were at €10.7bn and €10.5bn respectively.

Deutsche Borse was boosted by the two largest European mega-ipos of the year with Knorr-bremse and Siemens Healthineers, which raised €3.9bn and €3.7bn respectively, against the only mega-ipo in London – Aston Martin – which raised €1.2bn.

Peter Whelan, UK IPO lead at PWC, said: “Activity has been subdued across European exchanges for much of 2018, due to high market volatility and a significant correction to global indices in the first half of the year.

“Volatility has continued in recent months, driven by uncertainty around trade between the US and China, the wider geopolitical climate and the potential end of the current bull run.

“We are seeing a healthy number of firms preparing for an IPO in 2019 despite the Brexit negotiations.”