Figures for the first quarter of this year show that share floats of firms on the stock market produced more proceeds than a year earlier.

Initial public offerings, which are important in creating new high net worth individuals, created more new wealth in the first quarter of this year than a year ago, according to global figures issued yesterday. 

Proceeds from IPOs in Europe and the US grew in Q1 from a year earlier although Asia saw a decline, EY, aka Ernst & Young, said in a report. Market volatility in February also dragged on figures somewhat overall, it said.

Share floats, along with trade sales, the exercise of share options and other developments are key liquidity events tracked by wealth managers in seeking potential new clients. This publication also works with Wealthmonitor, a data and analysis firm, in examining trends in this space. 

The EY report showed that global IPO markets raised $42.8 billion in Q1, up 28 .per cent from a year ago, although the volume of offerings, at 287, fell 27 per cent, showing that average values created by IPOs rose.

"Driven by larger transactions, global IPO activity started out with a strong increase in proceeds in what is traditionally the slowest quarter of the year, despite a decline in deal numbers,” Martin Steinbach, EY global and EMEIA leader on IPOs, said.

“However, market volatility in February did slightly dampen investor confidence, slowing momentum gained from calendar year 2017, the highest performing 12 month period since 2007. Looking ahead, the outlook remains positive in many markets around the world and we expect to continue to see IPOs from a range of sources including large tech, high growth, cross-border listings, carve-outs and state-owned enterprises."

Americas
The Americas region was the only one to chalk up a rise in IPO volume and proceeds. There were 44 IPOs, raising $15.4 billion, an increase of 29 per cent in terms of volume and 22 per cent by proceeds from a year earlier. US IPO activity accounted for 36 IPOs raising $12.8 billion, up 44 per cent in terms of volume and 17 per cent by proceeds.

In the EMEIA [Europe, Middle East, India and Africa] region, results were buoyed by European “mega deals” and strong performances in India, EY said. 

These markets raised $16.0 billion in Q1 2018 with 86 deals, placing the region second to Asia-Pacific in terms of deal numbers. Proceeds rose by 191 per cent on the back of mega deals. The area saw two of the top three IPOs and five of the top 20 IPOs in Q1 2018. Emerging markets contributed strongly to overall IPO performance, with India's Bombay and National exchanges recording a 14 per cent increase in proceeds raised compared to Q1 2017 and a slight increase (5 per cent) in terms of deal numbers (39 IPOs). The Middle East saw a 17 per cent increase in IPO proceeds with former state-owned enterprises and family-owned and PE-backed businesses expected to drive IPO activity in the coming months.

Asia-Pacific
Asia-Pacific markets saw a decline in deal activity in Q1 2018 with 157 IPOs – a 39 per cent drop when compared with Q1 2017, and the lowest quarterly total since Q2 2016. Total proceeds this quarter stood at $11.4 billion, down 26 per cent compared to Q1 2017 and the lowest level since Q1 2016. However, despite the drop in IPO activity, Asia-Pacific remained the world's busiest region for new listings in Q1 2018. 

"IPO activity in Asia-Pacific this quarter was defined by the slower pace of Mainland China IPOs due to greater regulatory scrutiny and a slowdown in many markets within the region. Swimming against the regional tide, the Hong Kong Exchange saw an increase in deals that made it the busiest exchange in the world. Looking ahead, we expect a bounce-back in IPO proceeds in the next few quarters, driven by the listing of mega IPOs in Hong Kong, Japan and the ASEAN region," Ringo Choi, EY Asia-Pacific IPO leader, said.