EY Hanyoung "Global IPO Polarization by Region Deepens in First Half"

Global accounting and consulting firm EY Hanyoung announced on the 19th that “while initial public offering (IPO) activity in the Asia-Pacific region continued to contract in the first half of this year, the Americas and Europe, Middle East, India, and Africa (EMEIA) regions showed strong growth, highlighting a clear polarization between regions.”

According to the ‘2024 Q2 EY Global IPO Trend Report,’ the global IPO market raised a total of $52.2 billion through 551 listings in the first half of this year. This represents a 12% decrease in the number of listings and a 16% decrease in funds raised compared to the same period last year.

In the first half of this year, IPO demand was strong in the Americas and EMEIA regions, supported by a robust stock market, rising valuations, and investor enthusiasm. The number of IPOs in the Americas increased by 12% year-on-year to 86, with funds raised rising 67% to $17.8 billion.

The EMEIA region, centered on Europe and India, saw 249 companies go public, raising $24 billion. Accounting for 45% of the global IPO count and 46% of funds raised, EMEIA achieved its highest global market share since the 2008 global financial crisis, leading the overall global IPO market.

In contrast, the Asia-Pacific region experienced a subdued market atmosphere and investor sentiment due to multiple headwinds including geopolitical tensions, elections, economic slowdown, high interest rates, and reduced market liquidity. The region recorded 216 new listings and raised $10.4 billion in the first half, marking a long-term decline of 43% in the number of listings and 73% in funds raised compared to the same period last year.

In South Korea, a total of 27 IPOs were completed in the first half, a 10% decrease year-on-year, but funds raised increased by 68% to approximately $1.5 billion. Notably, the industrials sector, which saw a 450% surge in IPO count compared to last year, showed signs of recovery, accounting for over 40% of Korea’s total IPOs and 50% of the total funds raised.

Globally, there was a sharp increase in large IPOs funded by private equity (PE) and venture capital (VC). The proportion of funds raised through such IPOs rose from 9% in the first half of last year to 41% in the first half of 2024. In particular, 74% of the total funds raised in the Americas came from companies backed by PE and VC funding.

Jung-Ik Park, Head of the Audit Market Division at EY Hanyoung, stated, “Due to geopolitical tensions, companies may avoid high-risk regions and seek alternative IPO markets with more favorable regulatory environments. Such changes could potentially lead to the emergence of new financial hubs, reshaping the IPO market landscape.” He added, “Companies considering IPOs need to make strategic decisions based on the latest market information regarding regulations, offering prices, and timing in this rapidly changing IPO environment.”

Regarding the domestic market, he said, “Korean investors expect higher returns from overseas stock markets than from the domestic market, and are particularly influenced by global financial trends such as the U.S. stock market, which showed an upward trend centered on technology stocks in the first half of this year. For the domestic market to recover, substantial value-up is necessary, and the expectations and impact of IPO revitalization on the market are more important than ever. Although the market was not as active as in the second half of last year, a steady flow of IPOs above a certain threshold is expected to be a key driver of the domestic stock market.”