IPO funds raised globally may have plummeted 61 per cent in first quarter amid banking crisis, high inflation, EY says

In Asia-Pacific, the number of IPOs is expected to decline by 6 per cent, with proceeds slumping by 70 per cent

While the mainland’s IPO market was affected by Covid-19 lockdowns last year and the country’s sealed borders, Hong Kong was more affected by international events, Asia-Pacific IPO leader at EY says

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An electronic billboard displays the Hang Seng Index outside HKEX in Hong Kong’s Central district. IPO proceeds in the first quarter dropped 50 per cent year on year in the absence of a blockbuster deal in the city, according to a separate report by KPMG on Wednesday. Photo: Yik Yeung-man

Published: 7:30am, 30 Mar 2023Updated: 8:57am, 30 Mar 2023

Funds raised by newly listed companies globally might have plummeted by 61 per cent in the first quarter, as high inflation and a banking crisis pushed firms to put their initial public offering (IPO) plans on hold, EY said.

The number of IPOs globally is poised to decline by 8 per cent to 299 in the January to March period compared to a year earlier, with proceeds falling by 61 per cent to US$21.5 billion, the international accounting firm said in a report on Thursday morning.

In Asia-Pacific, the number of IPOs is expected to decline by 6 per cent to 175, with proceeds slumping by 70 per cent to US$12.7 billion. Mainland China and Hong Kong were also down in the first quarter.

“Mainland China locked down many cities due to Covid-19 last year and fully reopened its borders only this year,” Ringo Choi, Asia-Pacific IPO leader at EY, said in an interview. “This has affected the number of IPOs in the first quarter.

“Hong Kong, which is an international financial centre, was more affected by international events such as the banking turmoil in the United States and Europe.”