Global IPO activity breaking new heights, up by 19 percent in 2020: EY

Despite the uncertainty of 2020, IPO investors enjoyed a prosperous year as IPO activity proved resilient to the impact of the COVID-19 pandemic supported by low interest rates and expansionary monetary policies. Global IPO volumes continued to accelerate, increasing by 19% to 1,363 billion USD, according to EY data.

The Americas region saw the biggest year-on-year increase in both IPO volumes and proceeds, with 2020 IPO numbers increasing 30% to 282, and proceeds rising 78% to US$97.9b. Asia-Pacific also made significant gains recording a 20% increase in IPO volumes to 822 IPOs and 45% in proceeds to US$136.2b. In EMEIA, while IPO numbers rose 7% to 259 IPOs, proceeds fell 43% to US$33.9b. Overall, 2020 saw a steady increase in cross-border IPO volume, accounting for 7.9% of global IPOs and 10% by proceeds, compared with 8% and 7.1% in 2019 respectively.

Florin Vasilică, Strategy and Transactions Leader, EY România, explained: “In the context of the uncertainties generated by the current health crisis, the Romanian market demonstrated a certain degree of stability and resilience. In Q4’20, the local stock exchange hosted on AeRO platform two IPOs of EUR 1.1m from two important sectors such as agriculture and IT&C. Moreover, the local market has become a reliable liquidity provider for the issuers of bonds, with the Ministry of Public Finance attracting in the last quarter of 2020 over EUR 550m from retail investors. Other bond issuances cumulated approx. EUR 12.3m in Q4’20 from strategic sectors such as banking, consumer and real-estate.

In 2021, the volatility on the equity market could persist depending on the evolution of the COVID-19 pandemic, success of vaccine campaigns and overall global market performance. Nevertheless, the Romanian capital market has the opportunity to consolidate and become an important financing channel for both private and State-owned companies, especially now that the Romanian Government is considering repealing Law no. 173/2020 which regulated the interdiction of public listings for two years. In this current context, listing of small stakes in state-owned companies could alleviate the state budget, leaving room for the financing of strategic public investments.

With central banks continuing to support the markets through liquidity injections, there is an excess of money that can allow projects to be successfully financed. Thus, local entrepreneurs can benefit in 2021 from this multitude of financing sources to secure medium and long term development.”