EY Global IPO Trends



EY Global

IPO Trends

2016 4Q

Funding accelerated growth in a year of unprecedented uncertainty

Against a backdrop of political and economic uncertainty, IPO

activity in 2016 declined compared with the previous year.

Asia-Pacific, led by Greater China, continued to dominate,

increasing its share of global IPO activity followed by EMEIA

and the Americas. Prospects are brighter, as the US is

expected to lead a recovery in global IPO activity in 2017.

D espite a late pick up in activity in some regions, both deal

numbers and roceeds raised finished the year maredly lower

than in n total, there were , s lobally in ,

which raised Ub, comared with , s raisin

Ub in a decline by deal number and by

caital raised ot only were there fewer deals, there were also

fewer meadeals n , there were only deals with

roceeds of more than Ub, down from the reious year

rom an area ersectie, siaacific was the eicenter of

lobal actiity, dominatin in both olume and roceeds

raised and the reion continues to ain maret share n ,

siaacific echanes, drien by reater hina, accounted for

of the lobal number of s and of roceeds raised,

a third successie year of lobal maret share ains by deal

number and second successive year by capital raised. EM EIA

echanes raned second, accountin for by lobal deal

number and by roceeds EE saw a sliht dro in lobal

maret share by deal number in but a larer dro by

roceeds comared with n contrast, the mericas,

which is dominated by U actiity, lost lobal maret share

for the third year in a row and accounted for only

of total olume and of caital raised

reater hinas on on toc Echane ain aret and

rowth Enterrise aret E and ainland hina henhen

and hanhai echanes were the three most actie echanes

lobally in , with , and s resectiely ien

the mared ic u in actiity in the reion in the second half of

the year, si of the to ten echanes by deal numbers were from

siaacific in

t the country leel, only a few reions recorded an annual

increase in actiity ndia was the standout erformer, recordin

a increase in deal olume and a sure in roceeds

raised, drien by stroner economic fundamentals and a

robusiness olitical reime ndias ombay ain aret and

E board are raned seenth most actie in terms of number

of deals lobally and actiity is at a siyear hih ustralia

and ew ealand echanes recorded small increases in

roceeds raised and deal numbers, while frican echanes saw

a lare increase in roceeds een thouh deal numbers fell

E and baced actiity also declined in ,

accountin for a lower roortion of lobal actiity than the

reious year inancial sonsor articiation droed

to of lobal olume from in and to

of lobal roceeds from in his reects not ust

the lower leels of baced actiity on EE and U

echanes, but also the shift of actiity to sia, where the

leel of maret enetration is maredly less

Political and economic uncertainty suppresses 2016

IPO activity

arely, if eer, has there been a year with uite so many comle,

interrelated eternal factors for decisionmaers to contend with

he tone for both business and inestor sentiment was set

early in the year he olitical uncertainty of the U residential

election was comounded by a host of other eoolitical

factors, includin the Us EU referendum and the reit

result, iddle East tensions and the EU mirant crisis rom

an economic and financial maret ersectie, dealmaers

faced olatility in euity marets and oil rices, concerns of a

slowdown in the rowth rate in ainland hina and uncertainty

oer U monetary olicy ainst this bacdro, unsurrisinly,

many candidates decided to be atient and reare for

instead of ris a listin amid such uncertainty

Flex ibility and optionality are key in strategies to

accelerate grow th

he ability to delay an has been made easier by the rowth

in the riate caital maret he aailability of alternatie

sources of caital, in both euity and debt forms, has ien

riate comanies increased eibility in how they fund their

eansion and innoation

IPO sentiment


ur radar contains a ariety of

maret factors that may imact

inestor sentiment for s

re comanies should be

aware of how these factors may

affect their business and ultimately

the timin and alue of their




Interest rate


US policy changes



Oil and commodity


Impact of UK









Potential impact

• reare for more narrow


• resere otionality

with early readiness


• onsider an array of eit


• eed for eibility in timin

and pricing

2 | |

Global IPO and M&A by deal numbers

Global IPO and M& A by deal numbers

Global IPO and M&A by deal value

Global IPO and M& A by deal value









Number of M&A deals







Number of IPO deals

M&A deal value (US$b)









IPO deal value (US$b)














































Number of M&A Number of IPOs

Note: 4Q16 M&A activity is based on announced M&A deals from October and November 2016, and 4Q16 IPO activity is based on priced IPOs

from ote October and November actiity 2016. is based on announced deals from ctober and oember ,

and actiity is based on riced s from ctober and oember

Page 1

4Q16 Global IPO update











































M&A deal value US$b IPO proceeds US$b

ote actiity is based on announced deals from ctober and oember ,

and actiity is based on riced s from ctober and oember

Note: 4Q16 M&A activity is based on announced M&A deals from October and November 2016, and 4Q16 IPO activity is based on priced IPOs

from October and November 2016.

Page 2

4Q16 Global IPO update


or larer, wellestablished comanies facin disrutie

technological change, adopting a multitrack strategy that

facilitates the acuisition of innoatie disrutors is a roen

stratey for rotectin or adatin the business model, buildin

innoation and acceleratin rowth t also ees otions oen

for a later, larer

or technoloy comanies with no time to lose, eein multile

otions oen is essential to fund innoatie rowth effectiely

hese businesses may announce lans to list while simultaneously

entertainin aroaches from financial sonsors and retainin the

eibility to ursue a trade sale or acuisition

Preference for IPOs remains strong in a multitrack w orld

ith so many fundin and eit otions in lay, the balance

has shifted in faor of a new ind of , in which bier, more

stable businesses come to the ublic marets later in their life

cycle oweer, while the runway may hae lenthened,

there are seeral reasons why a ublic listin remains attractie

for many comanies

aterstae comanies considerin s are often drien less

by fundin needs, but more by the need to secure a hiher

brand rofile and the oortunity to access new marets ia

crossborder listin oortunities s are much more than

a one- time opportunity to raise capital; they provide repeat

oortunities to raise additional caital from inestors ia

followon listins mortantly, a listed comanys stoc also

ies comanies a liuid currency that can be used to fund

acuisitions as they loo to further accelerate rowth throuh

inoranic eansion

ublic comanies also offer inestors reater liuidity and are

often seen as bein more oen, and therefore, a safer home

for inestors funds ublic comanies are also able to attract

leadin talent and their better reutation hels when biddin

for contracts ll these factors hel elain why inestors are

prepared to pay a premium in the public markets.

2017 IPO outlook remains optimistic despite ongoing

uncertainty in a period of transition

Euity marets hae risen to new hihs toward the end of

this year olatility, as shown by measures such as the E

olatility nde ® , EU ® olatility, E

olatility nde and olatility nde, has fallen and trailin

E ratios are trendin uward

esite these uncertainties, the rosects for actiity in

loo better than for n reater hina, currently

the enine room of lobal actiity, the hina ecurities

eulatory ommission started to seed u the aroal

of s in oember ith more stable euity marets

in ainland hina, we eect there will be a hiher number of

s aroed in than in the reious year n on on,

we anticiate the number of entrereneurial s will be stable,

but that aerae deal sie will fall as there are currently less

stateowned enterrise E s in the ieline

n Euroe, the mi of suortie economic fundamentals alon

with onoin olitical uncertainty maes the outloo slihtly

more cautious, but we eect that, at a minimum,

actiity will surass leels

he outloo for actiity is briht in the U, where

we eect a rebound from what has been the slowest year

for s since s the ieline continues to fill,

we anticiate that deal actiity in will eceed the leel

of this year articularly encourain is the news that one

of the larest unicorns has filed for an now that the U

residential election is oer deal of ery sinificant sie

could provide the stimulus the market needs, re- igniting

interest in s

| 3

Global IPO


4Q16 YTD

(January–December 2016) 1

Volume and value


deals globally

(16% decrease on 4Q15 YTD)


in capital raised

(33% decrease on 4Q15 YTD)


“ Geopolitical risks are constantly evolving, and form a challenge for

companies: they are hard to predict and their results can cascade

into a range of other business risks. The interplay between

geopolitical and economic challenges makes it even more difficult

for companies to manage their global value chain and to fund their

growth strategies. With recent political developments like Brexit

and the US elections, we are in a period of transition, which

underlines the importance of understanding and monitoring

geopolitical risks to better prepare for an IPO.”

Dr. Martin Steinbach

EY Global and EMEIA IPO Leader

Rapid growth vs. developed

Rapid growth

markets represent

60% of global

IPO volume in

4Q16 YTD

Rapid growth


Financial sponsor activity was

constant in 4Q16 compared with 3Q16


of global


In 4Q16 YTD, PE and VC

accounted for 13% of

global IPOs (138 deals)

26% by proceeds


Three sectors trending


185 deals



171 deals


Health care

132 deals


Equity markets saw higher volatility in 4Q16 compared

with 3Q16


The VIX ® rose to 22.5% at the start of

November, but fell to 14% at the start

of December, signaling lower volatility

and higher investor confidence.

There were 33 withdrawn or

postponed deals in 4Q16, which

was lower than the 49 deals in


4Q16 IPO activity continued to be

affected by market volatility and

political uncertainty in the US and

the UK.

Ninety-three percent of 4Q16

IPOs priced within or above

expectations. 2

4 |

Asia-Pacific tops the leaderboard in 4Q16 YTD



US exchanges

ranked third by

global funds




Innogy SE

Top three deals in 4Q16



JR Kyushu

Railway Company

South Korea



Biologics Co. Ltd.




Asia-Pacific led by

global funds raised

Number of deals

Value of deals















European exchanges

ranked second by

global funds raised

Top six exchanges by funds raised








Main and GEM


(115 deals)



(98 deals)

New York


(34 deals)

Tokyo 3


(87 deals)


and First North 4


(49 deals)



(77 deals)

Home and away

Cross-border listings were 6% of

global IPOs during 4Q16 YTD as

compared with 8% during 4Q15 YTD.


Top six countries/regions

by deal volume 5



China 6 US

94 91


1. 4Q16 YTD (January-December 2016) IPO activity is based on priced IPOs as of 2 December and expected IPOs by end of December.

2. Focus on open-price IPOs with deal value above US$50m.

3. Tokyo Stock Exchange include IPOs from the Main Board, MOTHERS and JASDAQ.

4. NASDAQ OMX and First North include IPOs on the Copenhagen, Helsinki, Iceland and Stockholm markets.

5. Based on the listed company domicile nation.

6. Greater China includes Mainland China, Hong Kong, Macau and Taiwan.




75 55




| 5

US market poised for strong growth

has been a uiet year for strateic transactions in the U,

with a decline not ust in s but also in actiity across

the board usinesses roceeded with caution, faced with a year

full of headwinds from lobal macroeconomic issues, maret

volatility and political and monetary policy uncertainty both

in the U and lobally oweer, with olatility stabiliin and

marets reachin new hihs, we are much more otimistic about

the climate for dealmain as we moe into

• here were s in the U in raisin Ub, a

decline of in terms of caital raised and in terms of

number of s, main this the slowest year for actiity

by both deal number and roceeds since the lobal financial

crisis in

• or the first year since , the U did not feature in the

lobal to deals of the year he two larest U deals in

were crossborder listins hinas Eress, which

raised Ub, and aans E or, which raised Ub

• ew or toc Echane saw s in , which raised

Ub, accountin for of roceeds worldwide, but

only of lobal deal number

• esite weaer actiity, was the worlds sith most

actie echane by both deal numbers and roceeds here

were deals raisin Ub, accountin for of lobal

s and of roceeds

Financial sponsors active in private and public markets

onsorbaced s continue to drie the maret,

reresentin of U s and of roceeds in

E and inestors remain eually actie behind the scenes

the abundance of riate caital from both E and inestors

hae roloned the time to for comanies that would hae

otherwise been bound sooner s a result, we will see more

mature comanies oin ublic than before

Looking at sectors more broadly, the health care and technology

sectors led U actiity in , reresentin and

of deal numbers resectiely he technoloy and enery sectors

led by roceeds, accountin for and of caital

raised respectively.

Cautiously optimistic on prospects for 2017

uorted by the s ostelection rally, the ® inde

is currently around , and s are outerformin

maor maret indices here is now a ieline of more than

comanies ready to list, ecludin those that hae filed their

reistrations confidentially e anticiate that there may be a

brief sure of actiity in the final wees of the year

lthouh uncertainty remains oer what residentelect onald

rums olicies will mean for comanies, inestors, marets

and the U economy, early maret sinals are ositie isin

euity indices and the increasin baclo of comanies that hae

delayed their listin in , suest there will be considerable

aetite for comanies to o ublic when uncertainty settles, and

olitics and economics alin, enablin maret windows

to open.

e anticiate that financial sonsors will remain actie layers

in the marets, consistent with historical trends Estimates

from rein suest there is more than Ub of dry owder

sittin in the funds of and E firms heir eits from their

ortfolio comanies will continue to be a ey source of

candidates e anticiate that will surass the number of

s in and that the trend toward lower deal sies

may persist.

e eect that sonsorbaced s will remain a ey drier of

actiity in , as risin euity indices suort more attractie

aluations rom an aftermaret erformance ersectie, this

years U s are currently tradin on aerae aboe

their debut rices, with technoloy s currently tradin

rouhly around aboe debut rice erall, of s

riced in or aboe their anticiated filin rane, the roortion

risin to for technoloy s oweer, the need for

transaction seed and eibility will ensure that multitracin

remains baed into the cororate deeloment of riate

comanies and financial sonsors eit strateies

Time for tech again?

here was a dearth of technoloy s durin the first half of

, and at new listins raisin Ub, actiity for

the year remain low comared with the historic annual aerae

of s raisin Ub oweer, we note an encourain

uswin in the middle to later art of , with technoloy

s raisin Ub between uly to ecember oreoer, the

ieline of the bi names in technoloy is buildin and we eect

others to follow and test the ublic marets in

6 |



4Q16 YTD

(January–December 2016) 7

Volume and value

112 deals

(36% decrease on 4Q15 YTD)


(37% decrease on 4Q15 YTD)

Key trends

• 2016 IPOs are currently trading on average 17.6% above

their debut prices, with health care and technology IPOs

performing particularly strongly. The track record of IPO

outperformance is set to ensure investor interest remains

strong in these sectors going into 2017.

• US IPO activity will rally in 2017 as domestic businesses

seek to optimize open windows and more Asian and

European tech businesses look to access sophisticated US

investors with their deep understanding of tech business


• Private capital will remain a key feature of the US market

as more companies look to build flexibility into their

strategic growth planning going forward.


“There are a number of positive signs for 2017. Private

equity continues to provide a robust pipeline of strong

deals. The backlog of tech companies is starting to make a

debut. Unicorns are beginning to find a successful place in

the public markets. This momentum, when matched with

the stable, post-election markets, should lead to strong

performance for IPOs next year.”

Jackie Kelley

EY Americas IPO Markets Leader

Financial sponsors continue to drive

US IPO market

Three sectors trending


of US IPOs

PE and VC account for

56% of US IPOs (63 deals)

64% by proceeds



Health care

40 deals



23 deals



11 deals


IPO pricing and performance 8

IPO activity

4Q16 YTD 10

4Q15 YTD


34 deals


55 deals



77 deals


119 deals


7. 4Q16 YTD (January-December 2016) IPO activity is based on priced IPOs as of 2 December and

expected IPOs by end of December.

8. Pricing and performance is based on 105 IPOs on NYSE, NASDAQ and Bats exchanges that have

started trading by 2 December.

9. Year-to-date returns of equity indices as of 2 December.



10. In 4Q16 YTD, there was also one IPO on the Bats Exchange that raised US$290m, besides IPOs


first-day average return

increase in offer price

vs. 2 December 2016

median post-IPO

market cap

11. 4Q16 YTD saw 21 cross-border deals raising US$6.5b in total. There were three deals from Bermuda (US$1,652m),

two deals from Israel (US$34m) and one each from Argentina (US$323m) and India (US$61m).

Cross-border activity in 4Q16 YTD from

21 deals 11

China 8 deals (US$2,152m)

Europe 5 deals (US$935m)

Japan 1 deal (US$1,321m)

New registrations

Equity indices 9


VIX ® -18.3%

US$100.2m median deal size

4Q16: 25 deals, US$2.4b

4Q15: 51 deals, US$6.4b

DJIA +8.9%

S&P 500 +6.2%

Volatility index and postponed IPOs

Postponed and withdrawn IPOs

• 59 deals, -17%



| 7

sia-acific maintains leading position in global s

or the ninth consecutie year, siaacific was the worlds

leadin reion in terms of actiity n there were

s raisin Ub in roceeds, a lobal share of and

resectiely lthouh numbers and roceeds were

down on the totals for Ub in roceeds from

s the reion was much less affected by the downward

ressure eerted by the eoolitical uncertainty that affected the

Americas and EM EIA.

• i of the worlds ten larest s in were on siaacific

stoc echanes three in on on and one each on the

outh orea, oyo and hanhai stoc echanes

• i of the worlds ten most actie stoc echanes in terms of

olume were from siaacific fie by caital raised

• inancials and industrials were the reions leadin sectors by

roceeds while industrials and technoloy led actiity by


Australia sees slight rise in deal number

n a year where irtually eery maret worldwide bar ndia saw

a dro in actiity, ustralian ecurities Echane and

ydney toc Echane toether saw new listins ust

u on while roceeds were at at Ub raned

fifth in the lobal list of stoc echanes by olume of deals,

behind the on on, henhen, hanhai E and oyo

stoc echanes y roceeds, raned th

echnoloy, materials, real estate and health care were the most

actie sectors by olume in , and are eected to continue

to attract inestor attention in the comin year rossborder

deals will continue to come to maret as we see steady inuiries

from forein small to mediumsied comanies looin to list on

the , esecially in the technoloy and health care sectors

he number of financial sonsorbaced listins did not reach

the hihs of last year, with the maority of riate euity E and

enture caital firms in ustralia now in their inestment

hase of the cycle s a result, we eect the olume of E and

baced s to start icin u aain toward the end of

noin eoolitical instability and the resultin olatility is

driin the maret to become more selectie on ricin a

number of deals were rericed toward the end of the year his

is liely to continue into , but with a stron ieline of

ready comanies reared to come to the ublic marets when

the time is riht, we eect to be another ositie year for

new listins

Japan finishes the year on a high

aan saw a steady ow of s in eery uarter throuhout

the year, resultin in an annual total of s on oyos ain

oard, E and altoether, slihtly down on the

total of nnual roceeds reached Ub 1 2 , down

from Ub last year actiity was boosted by a stron

fourth uarter, which included the Ub in ctober on

the oyo toc Echane of yushu ailway omany, the

staterun railway, roerty and bullet train oerator lobally,

this was the second larest deal in and the third larest

this year ollowin the aan ost oldins o td and aan

ost an o td s last year, this was the latest ste in the

drie by the be administration to conince ain aanese

households to transfer some of their ban deosits into the

euity maret

he other standout deal of inolin a aanese comany

was the dual listin in uly of E, nown as the sian rial to

hats, which oated in oyo and ew or, raisin Ub

n a year when roceeds from technoloy s worldwide has

droed, this was the second larest in the sector, behind anish

ayments comany ets , which raised Ub on

oenhaen in etember

n aan, the technoloy and consumer roducts and serices

sectors suorted by the recoery in consumtion hae

remained oular with inestors, a trend that is eected to

continue in his will be suorted in the loner term by the

aanese oernments innoation lan, which was launched in

une and is desined to stimulate fundin into cuttinede

sectors such as artificial intellience , robotics, bi data and

biotechnoloy his has resulted in a sure in cororate inestment

into these technologies.

erall, lower stoc maret olatility has strenthened inestor

confidence the iei toc erae has been relatiely stable

and made steady ains throuh the second half of ainst

this bacdro, we eect the first two uarters of to

see rowin actiity as the combined effect of monetary

and fiscal easin is eected to ie a further maor boost to

economic rowth

Activity in ASEAN remains lackluster

actiity in outheast sia has been startsto for much

of he year bean slowly with inestors in a waitand

see mode aution was heihtened by a number of factors

includin uneen lobal economic data, lower cororate earnins,

commodity rice olatility, the uncertainty oer reit and the U

elections, as well as dierent interest rate olicies actiity

iced u in the second uarter but droed bac aain in the

third uarter due to a combination of olitical and economic

factors, notably the concerns about ossible slowdown in hinas

rowth rate, which continued to affect E business confidence

and rowth, which in turn sered as a brae on s

small urry of deals in the fourth uarter ushed Es

total for the year to , down from in , while roceeds

droed to Ub from Ub a year ao hrouhout

there hae been s in hailand, inaore, ndonesia,

alaysia and, to a lesser etent, the hiliines and ietnam

e eect this breadth of actiity to continue in althouh

sentiment in the reion could be damened by eoolitical

deeloments, slow trade numbers and uncertainty oer the

direction of the rum administration in the U, esecially

the derailment of the ransacific artnershi, which loos

increasingly certain.

ainst this bacdro, some inestors will continue to faor debt

offerins, esecially in the face of otential interest rate rises

eal estate inestment trusts Es and business trusts will also

remain oular strateies due to their liuidity and steady yields

1 2

aital raised on aanese echanes in was Ub, this ecluded the Ub duallistin of E or in uly on E and oyo toc Echane because the maority of

roceeds were raised on E ia merican eositary eceits

8 |


IPO highlights

4Q16 YTD

(January–December 2016) 13

Volume and value

638 deals

(6% decrease on 4Q15 YTD)


(21% decrease on 4Q15 YTD)

Key trends

• Although Australia saw a slight rise in deal

numbers in 2016 compared with 2015,

increased pressure on pricing will continue

in the coming year.

• Japan is experiencing a surge in

investment in innovations such as artificial

intelligence (AI), robotics and big data,

indicating technology will be the sector to

watch in 2017.

• Investor caution in ASEAN is likely to

remain in the first two quarters of 2017,

acting as brake on IPOs.


“Despite fears of rising interest rates and the continuous contraction in both the size

and number of IPOs around the world in 2016, Asia-Pacific led the way in terms of deal

volume and capital raised, largely driven by strong activity on Hong Kong and Mainland

China exchanges. The IPO markets in Japan, Australia and South Korea were also active,

buoyed by a number of blockbuster deals. The outlook for 2017 is positive but having

a lot of uncertainties due to various new government policies in promoting the local

economy. We expect Asia-Pacific to hold on to the top spot, driven by a number of large

IPOs from financial services, fintech and natural resources companies.”

Ringo Choi

EY Asia-Pacific IPO Leader

Top six exchanges by funds raised







Main and GEM


(115 deals)



(98 deals)

Tokyo 14


(87 deals)

Shenzhen 15


(114 deals)

Main and KOSDAQ


(60 deals)



(83 deals)

Six sectors trending


125 deals



122 deals




79 deals



61 deals


Health care

52 deals



38 deals


IPO pricing and performance 16


first-day average returns

Equity indices 17



increase in offer price vs.

2 December 2016

median post-IPO market cap









median deal size



ASX 200


Cross-border IPOs

Greater China issuers had 20 cross-border deals with six deals each on NASDAQ and KOSDAQ, two deals each on

NYSE, SGX and ASX, and one deal each on Deutsche Börse and Sydney Stock Exchange.

Singapore issuers had five deals on the Hong Kong Main Market and GEM, which raised US$67m, and one deal

that raised US$1.4m on NASDAQ OMX First North in Stockholm.

Hong Kong Main Market and GEM saw five deals from Singapore, two deals from Malaysia and one deal each from

Japan and South Korea.

13. 4Q16 YTD (January-December 2016) IPO activity is based on priced IPOs as of 2 December

and expected IPOs by end of December.

14. Tokyo Stock Exchange includes IPO listings from the Main Board, MOTHERS and JASDAQ.

15. Shenzhen Stock Exchange includes IPO listings from the Main Board, SME Board and ChiNext.

16. Pricing and performance is based on 560 IPOs of exchanges that have started trading by 2

December. Data as of 3 December.

17. Year-to-date returns of equity indices as of 2 December.

| 9

Greater China goes from strength to strength

fter a eriod of uncertainty in the latter art of ,

confidence and stability hae returned to the reater hina

maret, with the number of deals steadily increasin uarterby

uarter throuhout the year n total, there were s on

reater hina echanes in raisin Ub in caital,

down and resectiely on , which had been drien

by a standout first si months

• n , on on ain aret E and rowth

Enterrise aret E was the worlds leadin echane by

caital raised with of the lobal total, ahead of hanhai

E with

• y olume, E and E also raned first with s

of the lobal total, slihtly ahead of henhen E and

hinet, which raned second with s , ahead of

hanhai toc Echane in third lace with

• reater hina echanes hosted four of the ten larest s

lobally by roceeds in , includin the larest deal of the

year of ostal ains an of hina o td, which raised

Ub on E in etember

Mainland China IPO activity accelerates

fter a steady start to the year on ainland hina echanes,

in which the hina ecurities eulatory ommission

souht to uell maret olatility by eein a close hold on the

ace of new listins, actiity has steadily uicened in the

second half of he stabiliation of the hinese economy

and stoc marets in the second half of has heled the

erformance of newly listed comanies

or the year as a whole, there was a total of s on ainland

echanes, raisin Ub in roceeds omared with ,

this reresented decreases of and resectiely oweer,

the fourth uarter can be seen as a turnin oint as the has

moed to accelerate the ace of s here were new listins

in , u from s in the rior uarter, while roceeds rose

to Ub from Ub in

s a result, the number of comanies on the waitin list

droed to around , from a hih of more than earlier in

the year eanwhile, inestor aetite for share s remains

oerwhelmin n , firstday returns for eery comany that

went ublic reached , the maimum ermitted by the

Hong Kong maintains a stable course

he on on ain aret and E saw a steady end to

the year with s raisin a total of Ub in his

was an increase of by olume but a fall of by roceeds

resectiely on omared with , deal numbers were

down in the fourth uarter and roceeds by or the full

year, there were s down from in a decline of

and Ub in caital raised, a decline Ub

his year the on on ain aret and E as a whole has also

seen a trend toward small deals he aerae deal sie in

droed to Um from Um in and Um in

his trend is underlined by continued robust actiity on the

E board funds raised increased and comared

with and , resectiely

inancials and health care were the two most actie sectors by

caital raised in the fourth uarter, raisin Ub and Ub

resectiely, accountin for and of the uarters total

he latter was due rincially to the Ub listin of hina

esources harmaceutical rou on the E in ctober, which

was the second larest deal in on on this year onsumer

roducts and serices and industrials were the two most

actie sector by olume in , accountin for and

resectiely of this uarters s on the on on ain aret

and E

Greater China w ill continue to lead the w ay in 2017

he outloo for the maret in the reater hina reion in the

comin year is ositie n on on, the tate dministration

of orein Echane has oened u a reen channel for

domestic enterrises to list, which should romote new listins

urthermore, the loose monetary enironment is eected

to continue for some time and there is an eectation that a

dereciation of the hinese renminbi may lead to caital

ows into the on on maret from ainland hina n the

i side, on on may lose out on some otential listins as

the acceleration of the share aroal rocess by

and the subseuent reduction in waitin time may ersuade

some M ainland companies to pursue a domestic listing.

n ainland hina echanes, actiity will continue to build

in the first half of , suorted by ey structural reforms

ith reater emhasis bein ut on information disclosure in the

reiew of candidates, the current listin rocess is moin

closer to a reistrationbased system eanwhile, the second

reiew of the ecurities aw in ecembers leislatie lan of

the tandin ommittee of the ational eoles onress

will roide a leal basis for the buildin of a multileel caital

system n the nearer term, the launch of the henhenon

on toc onnect roram in early ecember could be a

further boost to maret sentiment and could encourae reater

articiation by forein institutional inestors

Although some uncertainty remains, notably around the outlook

for the lobal economy followin the chane of the U olitical

administration and ucomin elections in a number of maor

Euroean countries, our eectation is that the reater hina

maret will continue to be the worlds most actie in the

coming year.

aret sentiment remains stron with the roortion of

oersubscribed s in on the ain oard at , u from

in the third uarter oweer, inestors are becomin more

discernin with reard to aluations the roortion of s

ricin in the uer rane droed to from in

urin , the total actiity on reater hina echanes consisted of s on on on ain aret s, Ub on on rowth Enterrise aret s, Um

hanhai toc Echane s, Ub henhen toc Echane the ainboard, the E board and hiet s, Ub and aiwan toc Echane s, Um

10 |

Greater China

IPO highlights

4Q16 YTD

(January–December 2016) 19

Volume and value

Hong Kong Main Market

71 deals

(18% decrease on 4Q15 YTD)


98 deals

(10% increase on 4Q15 YTD)


114 deals 20

(13% decrease on 4Q15 YTD)

Hong Kong Main Market


(27% decrease on 4Q15 YTD)



(19% decrease on 4Q15 YTD)


US$6.7b 20

(18% decrease on 4Q15 YTD)

Key trends

• A surge of new listings is expected in 2017 in

which small- and medium-sized enterprises are

expected to dominate the pipeline and there are

fewer listings of state-owned enterprises.

• Regulators will continue to support orderly

market development in both Hong Kong and

Mainland China, further boosting market

sentiment and encouraging greater participation

by foreign institutional investors.

• Cross-border activity will likely increase as more

Chinese technology companies look to list on US



“The capital markets in Greater China returned to stability this year with its

stock exchanges topping the global exchanges leaderboard in terms of both

IPO volume and capital raised. The Mainland regulator has started to accelerate

the IPO approval process and we expect this trend to continue in the coming

months. Moreover, the launch of the Shenzhen-Hong Kong Connect program

would be a further boost to market sentiment and is expected to encourage

greater participation by foreign institutional investors. With a strong pipeline

of companies ready to list and investor sentiment unaffected by political

shockwaves elsewhere in the world, we expect Greater China exchanges to

remain the world’s most active markets for IPOs in 2017.”

Terence Ho

EY Greater China IPO Leader

Six sectors trending


89 deals



58 deals




36 deals



31 deals



22 deals


Health care

22 deals


IPO pricing and performance 21

Hong Kong Main Market Shanghai and Shenzhen Equity indices 22





first-day average


increase in offer price vs.

2 December 2016

median post-IPO

market cap

median deal size





first-day average


increase in offer price vs.

2 December 2016

median post-IPO

market cap

median deal size










Mainland China’s IPO pipeline

More than 740

companies are in the China Securities

Regulatory Commission (CSRC) pipeline.

More than half (55%) of the companies

are planning to list on the Shenzhen Stock


Around 34%

are expected to be PE- or


CSRC IPO pipeline

19. 4Q16 YTD (January-December 2016) IPO activity is based on priced IPOs as of 2 December and expected IPOs by end of December.

20. Shenzhen Stock Exchange includes IPO listings from the Main Board, SME Board and ChiNext.

21. Pricing and performance is based on 66 IPOs on Hong Kong Main Market and 182 IPOs on Shanghai and Shenzhen stock exchanges that have started trading by 2 December. Data as of 3 December.

22. Year-to-date returns of equity indices as of 2 December.

| 11


EE cautiously optimistic amid uncertainty

s redicted, in the EE reion erformed stronly,

with the reion ranin second lobally in terms of caital raised

and number of s, with a stron dierence in maret actiity

across the reion hile echanes in Euroe and the iddle East

eerienced notable declines in actiity leels, ndia and frica

erformed stronly

combination of olitical and economic factors weihed heaily

on Euroean marets in esite a remarable

rally that saw roceeds lea on more deals than the

recedin uarter, actiity for the year s raisin

Ub was down by number of deals and down

by caital raised iddle East echanes eerienced a similar

deterioration with roceeds down and the number of s

down s raisin Ub in

ndias echanes by contrast made the biest ains of any

territory lobally, recordin a utic in roceeds on a

increase in deal numbers s raisin Ub in

frican echanes were not far behind with caital raised leain

, albeit on the bac of a reduced number of deals s

raisin Ub

• esite a relatiely stron fourth uarter that saw a dramatic

um in caital raised comared with the third uarter,

EE echanes raised only Ub from s durin

, a decline of by roceeds and by olume of

deals comared with

• ndias ombay ain aret and E board and Us ain

aret and featured stronly amon the lobal to

echanes in , ranin seenth and ninth resectiely

by number of deals, while and its unior maret

toether raned tenth y caital raised, raned

fifth lobally in , with the Us echanes in seenth

osition and ermanys eutsche rse in ninth lace

• n terms of meadeals, eutsche rse was the star erformer

in , hostin the nnoy E listin that raised Ub the

larest deal lobally in the uarter and the second larest of

the year oerall oenhaen and ondon ain

aret also featured stronly in the lobal to ten with

two deals and one deal resectiely

Steady valuations and low er volatility prove European market


ac of redictability in terms of electoral eents suests the

world of caital marets has become a more uncertain lace

hile this has clearly had a deterrent effect on the listin

ambitions of Euroean comanies, Euroean euity marets

hae roed remarably resilient, with aluations recoerin

uicly after the shoc of the Us reit ote and aearin

barely to reister the imact of the U ote result aluation

leels, as demonstrated by trailin E of maor euity indices,

hae also held steady or are trendin uward, indicatin stron

analyst and inestor confidence, bodin well for future maret


olatility, always a ey concern for comanies considerin ,

has also subsided maredly in the aftermath of both eents

suestin windows are rincially oen as we moe into

Political risks remain …

s we loo ahead to , the ey riss for EE s remain

olitical in nature oncerns abound oer the imact of new U

policies on global trade patterns and their potential to disrupt the

economic rowth of Euroean countries e also see uncertainty

reardin ederal eseres interest rate olicy and the otential

nocon effect for the Euroean entral ans midterm olicy,

which may increase caution in terms of lannin

… But pipelines are building

f nothin else, the ey learnin from is that caital marets

are resilient, desite uncertainty and that aryin leels of

confidence will eretuate an uneen maret erformance

across the EE reion in

n Euroe, with olatility down, aluations u and monetary olicy

supportive, it is no surprise that pipelines are continuing to rebuild.

emand is stron with inestors searchin for rowth and een to

loc in returns from risin euity alues

he ey uestion of course is whether Euroean issuers will be

reared to weather the olitical ris and uncertainties and o

ahead with their transaction, lacin their business and

leadershi in the full low of ublic scrutiny, or whether they stic

with more conseratie strateic otions ur iew is that while

actiity leels are liely to imroe on , is

not liely to see a sinificant recoery in actiity leel omanies

will want to ee their otions oen, stay eible and ic the

otimal stratey to accelerate rowth when the time is riht

n the iddle East, by contrast, we anticiate that actiity leels

will remain deressed because of onoin sinificant reional

political and economic instability.

Looking beyond Europe and the M iddle East, India is likely to

remain the ewel in the crown of actiity in EE in

ith a supportive political backdrop, upbeat economic sentiment,

imroed business confidence, easin inationary ressure

and stable forein direct inestment inows, the ieline is

looin solid for iewise, we are hoeful that the stron

entrereneurial sirit in deeloin marets in frica will

continue to translate into a solid ieline of s

12 |



4Q16 YTD

(January–December 2016) 23

285 IPOs with US$37.7b proceeds





131 IPOs

(40% decrease on 4Q15 YTD)

154 deals

(3% decrease on 4Q15 YTD)

Proceeds US$35.3b

(46% decrease on 4Q15 YTD)

Proceeds US$2.4b

(26% increase on 4Q15 YTD)

Key trends



• We anticipate an uptick in IPO activity as we

move into 2017 while market windows are

staying narrow, opening and closing quickly.

• In the medium term, political and economic

uncertainties over trading relationships and

EU stability may influence issuers’ appetite to

complete an IPO during the transitional period


• In India, IPO activity looks set to remain strong

driven by a combination of high investor

confidence and regulatory reforms.


“2016 has been a start-stop year for IPOs in EMEIA. What happens in

the UK and US matters to companies’ growth prospects in EMEIA, even

though equity markets have proved remarkably resilient so far. As we

look ahead to 2017, political uncertainty in the form of US policy and

EU stability remains firmly at the center of our radar, with economic

risks not far behind. Pipelines are building, but when the future is

uncertain, preserving transaction optionality with a multitrack funding

strategy is key for companies looking to accelerate growth.”

Dr. Martin Steinbach

EY Global and EMEIA IPO Leader

Top five exchanges by funds raised



Deutsche Börse




First North 24


(49 deals)

Main Market and AIM


(55 deals)

Deutsche Börse


(7 deals)

Bombay and SME


(66 deals)

Euronext and Alternext


(18 deals)




Financial sponsor activity fell by

36% in 4Q16YTD compared with


PE/VC accounted for 16% of

EMEIA IPOs (46 deals)

Three sectors trending

46% by proceeds (US$17.3b) Industrials

40 deals

Main markets 25 Junior markets 25 (US$5.1b)

IPO pricing and performance

+4.6% +11.7%

first-day average


+3.9% +29.7%



increase in offer price

vs. 2 December 2016

median post-IPO

market cap

average deal size



first-day average


increase in offer price

vs. 2 December 2016

median post-IPO

market cap

median deal size

Equity indices 26

FTSE 100


CAC 40

Volatility indices



40 deals







JSE All share -3.0%



Postponed and withdrawn IPOs

• 39 deals -29%

Health care

39 deals





Cross-border IPOs

• 21 (7%) EMEIA issuers conducted cross-border listings,

consisting of:

• 13 IPOs to exchanges within the EMEIA region

• Eight IPOs to exchanges outside the EMEIA region

• Four Asian companies and two US company conducted crossborder

listings on EMEIA exchanges

23. 4Q16 YTD (January-December 2016) IPO activity is based

on priced IPOs as of 2 December and expected IPOs by end of


24. NASDAQ OMX and First North include IPOs on the Copenhagen,

Helsinki, Iceland and Stockholm markets.

25. Pricing and performance is based on 125 IPOs on main markets

and 148 IPOs on junior markets that have started trading by 2

December. Data as of 3 December.

26. Year-to-date returns of equity indices as of 2 December.

| | 13 1

UK set for a quiet year

Uncertainty around the EU referendum and the subseuent

decision to eit the EU had a sinificant imact on the U

maret in he year ot off to a slow start as the first half

saw some comanies delayin their lans ahead of the une

referendum he uneected ote to leae the EU ensured that

this uncertainty carried on into the second half of the year, with a

mared further reduction in the number of deals and articularly

in the leel of caital raised, main this the slowest year for U

s since

• erall there were s on the U ain aret and

lternatie nestment aret durin a decline

of comared with , with of actiity

concentrated in the first half of the year

• roceeds raised fell by to Ub in from

Ub in the reious year he fourth uarter was

articularly wea with fewer funds raised than in the

same period last year.

• ondons ain aret and slied from fifth osition in

to seenth in amon the worlds most actie

echanes by caital raised and from eihth to ninth osition

in terms of deal olumes

Smaller deals across many sectors

rom a sector ersectie, health care and technoloy were

the most actie sectors in , each accountin for of

deal olume, followed by financials and enery

ealth care dominated roceeds raised, accountin for

of caital raised in , heled sinificantly by the lare sie

of onaec rou lcs in a year otherwise dominated by

smaller deals.

onaec was the most sinificant of and the larest

U listin of the year by a considerable marin t was the Us

only meadeal an with roceeds of more than Ub

durin , shruin off neatie maret sentiment to raise

ross roceeds of Ub in ctober onaec, which focuses

on roducts for manain chronic conditions and acute wound

care, was oated by its riate euity E owners, who will both

retain a stake in the business.

PE looks to take advantage of narrow IPO w indow s

riate euity was actie toward the end of the year hree

out of the four ain aret listins in were Ebaced,

raisin of the uarters caital his may reect the fact that

Ebaced businesses tyically hae the scale and eertise to

launch their listins uicly when maret windows oen Een

so, ricin continues to be tiht or eamle, the ricin of

Ebaced waste manaement rou iffas in ctober were

lowered to hel ensure the deal was successfully comleted

currently tradin on aerae aboe offer rice, while s

on in are currently tradin at aboe offer rice

nly one of the four ain aret s and two of the seen

s in are currently tradin below their list rice,

with the hihest erformer tradin aboe list rice at the

time of writin or as a whole, U s ehibit ositie

outerformance comared to broader euity indices s on

the ondon ain aret are currently tradin on aerae at

aboe offer rice, while listins on are currently tradin at

aboe rice

Poor pricing prompts IPO w ithdraw als

o attract the inestors reuired in the ostreit maret

enironment, many s hae had to be riced toward the lower

end of their rice rane his lower ricin has led to a number

of otential s bein withdrawn from the maret in the fourth

uarter and has been a sinificant factor in the lower leels

of actiity in the latter art of isys, ureym,

utomotie and ountain arehouse were amon the hiher

rofile withdrawals, while has delayed its listin until the

markets are more supportive.

any of the businesses that hae ut their listin lans on hold

hae not yet reised their timetables n art, this reects

difficulties in areein uon aluations amid a low ricin

enironment, but currency uctuations hae also added to the

difficulty of aluin reenue streams he iside is that the

weaer ound will mae U s more attractie to oerseas

inestors, but it will reuire a more stable maret enironment

before candidates return to the maret in force

Cautious outlook for the start of 2017

n the wae of olitical eents in both the U and the U,

inestor confidence has been dented ow ricin, the falterin

of the ostreit euity maret rally and onoin uncertainty

about what the U economy will loo lie outside the EU hae

all contributed to a waitandsee aroach amon many


e beliee a sinificant imroement in actiity is unliely until

uncertainty dissiates once the residential transition has taen

lace in the U and the U has formalied its EU eit stratey

rom a yearonyear ersectie, howeer, E and baced

actiity was lower in than in inancial sonsors

share of deal olume fell to from and their share of

roceeds raised declined to from in the reious year

ealistic ricin has heled ostoat erformance of s

in ewly listed stocs on the ain aret in are

14 |



4Q16 YTD

(January–December 2016) 27

Volume and value

London Main Market

16 deals

(52% decrease on 4Q15 YTD)

London AIM

39 deals

(34% increase on 4Q15 YTD)

London Main Market


(59% decrease on 4Q15 YTD)

London AIM


(72% increase on 4Q15 YTD)

Key trends

• The UK equity market recovery has stalled

ongoing uncertainty over the shape of the

Government’s EU exit strategy, which in turn

several IPO postponements and withdrawals,

with no immediate revision of transaction

timescales, suggesting 2017 will get off to a

slower start.

• A weak pound will underpin US and Asian

investor interest in UK IPOs, but a resolution

of the political uncertainty is required before


political events in both the UK and the US have caused a substantial drop

in agreeing upon IPO valuations. All of this in turn led to a number of

more ‘normal’ IPO activity levels is likely to be delayed until uncertainty

has subsided after the Presidential transition has taken place in the US

and the UK has formalized its EU exit strategy.”

Scott McCubbin

EY UK and Ireland IPO Leader

Financial sponsors continue to drive

UK IPO market

Three sectors trending


of UK IPOs

PE and VC accounted for

24% of UK IPOs (13 deals)

66% of proceeds


Health care

7 deals



7 deals



6 deals


IPO pricing and performance

London Main Market 28 Alternative Investment Market 28 Equity indices 29

+3.0% average return +9.7%

+19.0% vs. increase in offer price


median post-IPO

market cap US$63.9m



median deal size


average return

increase in offer price

vs. 2 December 2016

median post-IPO

market cap

median deal size

FTSE 100

FTSE 350






Cross-border activity in 4Q16 YTD 30

Italy and US had two deals each;

Guernsey and Malaysia had one deal

each, raising US$182.7m altogether

on AIM.

Israel and Philippines had one deal

each, raising US$8.1m altogether on

London Main Market.

Top three IPOs in 4Q16 by capital raised


Group plc



(Health care)

Civitas Social

Housing plc



(Real estate)

Biffa plc



(Consumer products

and services)

27. 4Q16 YTD (January-December 2016) IPO activity is based on priced IPOs as of 2 December and expected

IPOs by end of December.

28. Pricing and performance is based on 16 IPOs on London Main Market and 35 IPOs on AIM that have started

trading by 2 December. Data as of 3 December.

29. Year-to-date returns of equity indices as of 2 December.

30. There were eight cross-border IPOs on London Main and AIM in 4Q16 YTD.

| 15

E ssurance a ransactions disory

bout E

E is a lobal leader in assurance, ta, transaction and adisory

serices he insihts and uality serices we delier hel build trust and

confidence in the caital marets and in economies the world oer e

deelo outstandin leaders who team to delier on our romises to all

of our staeholders n so doin, we lay a critical role in buildin a better

worin world for our eole, for our clients and for our communities

E refers to the lobal oraniation, and may refer to one or more, of

the member firms of Ernst oun lobal imited, each of which is a

searate leal entity Ernst oun lobal imited, a U comany limited

by uarantee, does not roide serices to clients or more information

about our oraniation, lease isit eycom

bout E’s services

E is a leader in helin to tae comanies ublic worldwide ith

decades of eerience, our lobal networ is dedicated to serin maret

leaders and helin businesses ealuate the ros and cons of an

e demystify the rocess by offerin readiness assessments,

rearation, roect manaement and eecution serices, all of which

hel reare you for life in the ublic sotliht ur lobal enter of

Ecellence is a irtual hub that roides access to our nowlede,

tools, thouht leadershi and contacts from around the world in one

easytouse source or more information, lease isit eycomiocenter

E imited

All R ights R eserved.

E no bl

ED N one

his material has been reared for eneral informational uroses only and is not intended to

be relied uon as accountin, ta or other rofessional adice lease refer to your adisors for

secific adice



Dr. Martin Steinbach

E lobal and EE eader

martin.steinbach@ de.ey.com

J acqueline Kelley

E mericas eader


Ringo Choi

E siaacific eader

ringo.choi@ cn.ey.com

Terence Ho

E reater hina eader

terence.ho@ cn.ey.com

Shinichiro Suz uki

E aan eader


Scott McCubbin

E U and reland eader

smccubbin@ uk.ey.com

Find out more about future IPO prospects

or more information on lobal erformance

by uarter and year, and how the maret

loos set to deelo in , isit the E lobal


ey.com/ ipo

ote hrouhout this reort, anuary to ecember actiity

is based on riced s as of ecember and eected s by end of ecember

ource of data ealoic and E

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