China has become the leader in the world IPO market
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China became the world leader in IPO markets this year. Chinese companies raised $19.5 billion in initial public offerings in 2023, compared to $3.8 billion raised by US companies, the Financial Times estimated.
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Growth of activity on the IPO market
The lifting of strict restrictions due to the COVID-19 pandemic and the new simplified listing regime on the Shanghai Stock Exchange (SSE) and Shenzhen Stock Exchange (SZSE) contributed to the growth of activity on the IPO market in China this year.
American market
The activity on the American IPO market was negatively affected by the Fed’s rate hike, consistently high inflation, and fears of an economic downturn. In addition, the banking upheaval in the United States has reduced interest in new placements, the publication reported.
The number of IPOs in the US fell by 40% year-on-year in the first four months of 2023. According to the financial platform Dealogic, as a result, 56 listed companies raised a little more than $3.8 billion. Last year, during the same period, the companies raised about $12.3 billion on IPOs, despite the sell-off on the stock markets. In 2021, for the first four months, the volume of borrowing amounted to $130 billion.
Seth Rubin, head of U.S. equity capital markets at Stifel, said investors had begun to show more interest in IPO candidates but were slow to buy new listings, given that many IPOs were still trading at significant discounts to their initial valuations. .
The IPO market in Europe
The IPO market in Europe is also in decline, the publication writes. In Europe, according to the FT, this year corporate issuers attracted about £1.8 billion ($2.24 billion), which is 40% less than in the first four months of 2022.
In Great Britain, there were six listings in 2023, within which issuers attracted a total of £90 million. In its report on trading for the first quarter, the company that manages the London Stock Exchange (London Stock Exchange Group) for the first time did not include the latest data on new issues and total the amount of money raised on primary stock markets.
The Chinese IPO market is in relatively good condition compared to the USA and Europe, writes the FT.
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Source: Ministry of Finance
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