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Oct 22, 2020

Global IPO market sees historic boom in third quarter

Americas and Asia-Pacific regions witness more listing activity year to date than in 2019

Despite the rising number of Covid-19 cases around the world, the global IPO market hit historic levels in the third quarter as companies rushed to go public, according to a report from EY.

Between July and September, global IPO proceeds rose 138 percent year on year to $95 bn, the highest third quarter for the last 20 years, notes the report. Global IPO volume, meanwhile, climbed 77 percent to 445.

The biggest IPO of Q3 came from Semiconductor Manufacturing International, the largest chipmaker in mainland China, which raised $7.5 bn on China’s STAR Market.

Other notable deals include Snowflake’s $3.9 bn listing in the US – where the stock price doubled on the first day of trading – and THG Holding’s $2.4 bn debut in the UK. 

Buoyant sentiment in the stock market has tempted companies to list, even while a second wave of Covid-19 gathers pace worldwide. The stats for Q3 appear particularly impressive year on year as it is normally a quiet period for IPOs. 

The Asia-Pacific and Americas regions led the way in the third quarter, according to EY. Together, they accounted for more than 90 percent of IPO value globally over the three months.

Asia-Pacific saw the most activity in Q3, with companies raising $49.7 bn through 286 IPOs. The Americas region, meanwhile, saw proceeds of $37.8 bn from 104 new listings.  

While the majority of IPOs in the Americas took place in the US, Brazil saw 13 companies go public. Low interest rates have 'led investors to the stock market,' says EY, putting the South American country on track for its 'most active year since 2007'. 

The third major region covered by EY – Europe, the Middle East, India and Africa (EMEIA) – saw IPO proceeds of $7.5 bn and volume of 55 in Q3.

'In EMEIA, IPO markets continue to be impacted by the pandemic, as well as the US-China trade tensions, Brexit and US presidential election uncertainties,' wrote EY in the report.