Equity capital markets (ECM) volume in EMEA for the first half of 2019 was down 33% on the first six months of last year, according to Dealogic, but there was some reason for optimism, notably a strong run of IPOs in the second quarter.
After the quiet start to 2019, that was a welcome boost to ECM bankers who went to work on some large technology flotations, notably for Italian software company NEXI ($2.3 billion) and Emirati fintech Network International Holdings ($1.6 billion).
The first half of the year also witnessed a strong aftermarket performance for IPOs of above $50 million, with EMEA issuers giving buyers an average 15.1% return in the first week after launch, up eight times from the first half of 2018 and the highest average one-week return for any six-month period since 2013.
This, once again, raises the question of who benefits from these pops and the extent to which ECM structures favour a few well-connected institutional buyers and exclude retail investors that may be patient, committed, well-informed holders of issuers’ stock.
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| Anand Sambasivan, PrimaryBid |
Large technology IPOs may be the most closely watched component of the equity new issue market, but behind those headline deals, change is coming.
