Global IPO Watch - Q1 2020

20/04/20

Q1 2020

As a result of the rapidly developing global pandemic (COVID-19), key global stock exchanges suffered their worst intra day falls since the 2008 global financial crisis in March 2020, curtailing a positive start to the quarter in terms of IPO and Further Offer (FO) activity. In the same month, market volatility reached its highest levels since the global financial crisis due to the unprecedented impact of COVID-19 on global markets.

Q1 2020 can be viewed as a quarter of two halves:

The momentum seen in Q4 2019 carried on into January and February following UK election results and a clearer path forward on Brexit and some easing of global trade tensions, with IPO and FO activity levels particularly strong in the Americas and Asia-Pacific.
The IPO market was all but extinguished outside Asia-Pacific in March as the impact of COVID-19 was felt. Issuance in Asia-Pacific accounted for 58% of global money raised and 79% of global transactions in the month.

Even with COVID-19, Q1 2020 IPOs raised $35.7bn from 207 transactions, an increase of $15.7bn (78%) as compared to Q1 2019, albeit Q1 2019 activity levels were adversely impacted by geopolitical uncertainties prevailing during that period.

The outlook for the remainder of 2020 is highly uncertain and until the markets become more comfortable with a consensus on the effects of the lock-down measures on the economy and how recovery will look after unwinding the measures, we can expect further volatility as fund managers re-balance portfolios.