Global IPO activity rebounds, hitting historic high in Q3

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Q3 2020 saw the IPO's most active third quarter in the last 20 years by proceeds, and the second highest third quarter by deal numbers. Globally, YTD IPO activity accelerated, resulting in a 14% increase in the total number of IPOs to 872, and a 43% rise in proceeds of US$165.3B.

IPO activity in the Americas saw 188 deals raise US$62.4B in proceeds, up 18% and 33%, respectively YTD, while Asia-Pacific saw 554 IPOs raise US$85.3B in proceeds, rising by 29% and 88%, respectively. Both markets have already exceeded YTD 2019 levels. Cross-border IPO activity levels have held steady by deal numbers and proceeds, accounting for 8% and 10% of global IPO activity, respectively.

As for sectors, technology, industrials and health care once again topped the ranks. Technology saw 210 IPOs raise US$53.9B, industrials saw 168 IPOs raise US$23.3B and health care saw 159 IPOs raise US$33.3B.

"Although the market sentiments can be fragile, the scene is set for a busy last quarter to end a turbulent 2020 that has seen some stellar IPO performance," said Paul Go, EY Global IPO Leader. "The U.S. presidential election, as well as the China-U.S. relationship post-election, may be the key considerations in future cross-border IPO activities among the world's leading stock exchanges. Despite the uncertainties, companies and sectors that have adapted and excelled in the 'new normal' should continue to attract IPO investors."

YTD 2020 Asia-Pacific IPO activity has surpassed YTD 2019 activity by both volume (29%) and proceeds (88%). Activity in the region accelerated in part due to COVID-19 pandemic- related government stimulus policies, for example, employment subsidies provided to airlines in the region.

In China, Q3 2020 IPO activities are on track to hit historic highs with deal numbers and proceeds up 152% and 139%, respectively year-on-year. The market in Japan has also intensified compared to Q3 2019 with a 67% increase in numbers and 40% rise in proceeds.

"Robust IPO activity in Q3 2020 suggests that Asia-Pacific companies are choosing to protect their value through capital markets in preparation for a worst-case scenario," said Ringo Choi, EY Asia-Pacific IPO Leader. "IPO candidates are seizing opportunities to go public to shore up their capital base for future investments and remain resilient against a potential next wave of the pandemic. The strong valuations seen in some of the recently listed 'new economy' companies and those not impacted by the pandemic are giving positive signals to other potential IPO candidates looking to complete their transactions in the quarters ahead."

According to EY, a global leader in assurance, tax, strategy, transaction and consulting services, the outlook for Q4 remains positive with a healthy spread of deals in the pipeline across many markets. As long as the window of opportunity remains open, it is expected that deals will continue to be made.

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