The slow return of IPOs after two slow years

The slow return of IPOs after two slow years
The slow return of IPOs after two slow years

Paris (awp/afp) – Stock market entries are starting to resume. Financial players are full of hope in 2024, after two slow years due to rising interest rates.

In the first quarter, the stock exchange operator Euronext, which manages seven stock exchanges in Europe, recorded 10 new company listings on its markets and saw the return of large-value operations, notably with the arrivals of the French software publisher Planisware in Paris and of the Luxembourg investment fund CVC in Amsterdam in April.

Operations which have also been well received, which could attract other companies: “Planisware has seen its stock price already increase by 40% since its first listing (end of April, Editor’s note), this was not necessarily the case of IPOs (initial public offerings, editor’s note) of 2022”, underlines Guillaume Morelli, head of IPOs at Euronext.

Worldwide, the EY firm recorded 287 IPOs in the first quarter, with especially strong increases in the amounts raised in the United States and Europe.

Encouraging signals

Encouraging signals after the last two years “marked by rate increases, the fastest ever seen in the modern era of capital markets, by inflation bubbles which have a significant impact on economic growth” , traces Guillaume Morelli, who emphasizes that “SMEs and ETIs have suffered more than others”.

In 2021, the abundance of liquidity poured into the financial markets to support the post-Covid rebound, and the good performance of the stock markets had caused the number of IPOs in the world to jump to 2,436, a record, according to a study by the EY firm.

But the following year, the number of new listings fell by 42% and the amounts raised through these IPOs were more than halved. In 2022, it was especially in the United States that the halt was felt: the number of IPOs plummeting by 78%, to 90, and their amount by 94%, to 8, 6 billion.

A slight recovery was then visible in 2023 in the United States, with some large introductions, notably the British microprocessor manufacturer Arm and the shoe brand Birkenstock, which more than doubled the amounts raised on the American markets.

But Birkenstock was not well received by investors: its stock ended down 12.61% after its first day on the New York Stock Exchange in October. And the euphoria of the recovery quickly transformed into the reluctance of potential new arrivals.

At the global level, the year 2023 was nevertheless even worse than 2022 with 1,429 IPOs, the lowest since 2019 according to S&P Global, for $120.3 billion raised.

As for France, it saw the number of IPOs on the Paris Stock Exchange increase from 64 in 2021, to 31 in 2022, then 15 in 2023, still below its 2019 level, according to stock exchange operator Euronext.

In the stock market pipes at the global level, the inexpensive ready-to-wear group Shein, the Volkswagen subsidiary specializing in electric batteries PowerCo, the payment services company Stripe and the data management specialist Databricks have made share of quotation projects, but without precise timetable.

afp/vj

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