Fewer companies dared to go public in Q1

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Many companies are delaying their IPO plans in the face of uncertain conditions. “We’re currently seeing a lot of reluctance on the part of IPO candidates,” said Tobias Meyer, Head of Transaction Accounting and IPO Services at EY Switzerland. The relatively high price level until mid-March did not change that.

Ongoing geopolitical tensions and the recent turmoil in the banking sector have put companies on hold. According to the EY count, 299 companies worldwide entered the business area eight percent less in the first quarter than in the same quarter of the previous year, which was already weakened by the war in Ukraine.

$21.5 billion is not even half of the previous year ($54.6 billion) due to companies playing in these initial public offerings (IPO). According to EY, the largest IPO in the first quarter was the initial public offering of the gas division of oil company Adnoc from the United Arab Emirates, bringing in $2.5 billion.

For the first three months of the current year, there was no classic exchange access to the SIX Swiss Exchange. However, two Chinese companies, Zhejiang HangKe Technology Incorporated Company and Fangda Carbon New Material Co, also listed their warehouse receipts (GDR) on the Swiss stock exchange. As EY wrote, they received about 338 million francs.

However, Meyer assumes that general economic conditions will improve again in the current year. “The Chinese economy is recovering after the pandemic, the US economy is developing strongly, which will benefit European companies,” said the expert. In addition, the Swiss economy is developing “basically well”. The decisive factor for further IPOs this year is the calming of the financial world and the recovery of macroeconomic conditions.

According to the statement, EY IPO experts “rely cautiously” in the European IPO market. Due to the long phase of difficult market conditions, the IPO pipeline continued to fill up last year and also in the first quarter. Now companies would arm themselves for an IPO. “We observe that IPO candidates are working to ensure they are so-called IPO-ready to be ready at the right time,” Meyer says.

(SDA)

Source :Blick