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QE helps European IPOs bounce ahead of US and Asia

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Traders are pictured at their desks in front of the DAX board at the Frankfurt stock exchange. Reuters

Traders are pictured at their desks in front of the DAX board at the Frankfurt stock exchange. Reuters

REUTERS

Traders are pictured at their desks in front of the DAX board at the Frankfurt stock exchange. Reuters

Europe is getting its groove back - when it comes to initial public offerings.

The continent led global IPO volume by a wide margin in the first quarter of 2015, raising almost $20bn in the period as stock benchmarks surged. The activity stands in contrast to takeovers in Europe, which slumped by about one-fifth.

Europe's IPO fundraising - from companies including Ireland's Malin and Auto Trader Group in the UK - outpaced that in the US and Asia-Pacific combined, data compiled by Bloomberg shows. Europe was the only region where IPO volume increased from a year earlier. For the US, the first three months of the year were the slowest since 2009.

Even with Web domain-name company GoDaddy scheduled to raise more than $400m in New York on the last day of the quarter, that won't change. Europe is catching up as central bank policy, low oil prices and a lower euro stir investor optimism.

Last year, European offerings lagged the US, even excluding Alibaba Group's record $25bn IPO. The Stoxx Europe 600 has gained 15pc this year, while the Standard & Poor's 500 Index was unchanged.

"There's clearly a rotation under way out of the US and into Europe," said David Hermer, global head of equity capital markets at Credit Suisse Group. "Investors are seeming a bit more cautious on the US economy at the same time the market's trading at all-time highs, and investors are becoming more optimistic about the core of Europe."

Five companies in Europe raised more than $1bn each in IPOs this quarter. Privatisations helped drive the trend, including of Spain's airport operator Aena.

Irish Independent