Sunday 21 January 2018

Cash raised from European IPOs predicted to halve

Donald Trump’s US victory was one of the year’s shocks. Photo: AP
Donald Trump’s US victory was one of the year’s shocks. Photo: AP
Michael Cogley

Michael Cogley

Around €28bn is expected to be raised via stock market flotations by European companies this year.

However, the proceeds raised by initial public offerings (IPOs) will be half of what was generated in 2015, according to research from PwC.

The volume of offerings is set to fall by a quarter in a year full of geopolitical shocks including Brexit and Donald Trump's US election victory. PwC said activity on the Irish Stock Exchange "remained strong" with a number of listings on the Enterprise Securities Market (ESM).

In Ireland, a part flotation of AIB will be among the biggest deal of the year, if it happens.

The Nasdaq Nordic is set to be Europe's most active exchange in terms of both value and volume, with three of the top 10 IPOs across the bloc this year.

The value of flotations in London has fallen by around 60pc compared to this time last year while the number of IPOs has dropped by 35pc.

Despite the decrease in both the value and volume of IPOs, PwC believes the market remains open with liquidity available for the right companies at the right price.

"As we move into 2017 investors will be looking at elections in France, Germany and the Netherlands, which have the potential to unsettle the IPO markets across Europe," PwC transaction services partner Denis O'Connor said.

Meanwhile, a study by Deloitte found 70pc of Irish chief financial officers believe revenues will grow in 2017.

Three-quarters of respondents are predicting further capital expenditure in 2017 while 62pc expect to grow their workforce.

However, around half believe Brexit negotiations will have a negative effect on their business.

Irish Independent

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