2022 started off strongly, continuing the momentum of Q4/2021, with January producing the strongest opening month in 21 years by proceeds. However, by the second half of the quarter, worldwide stock market declines shifted the trajectory dramatically in the opposite direction, resulting in a significant drop in overall activity. For Q1/2022, the global IPO market saw 321 deals raising US$54.4 billion in proceeds, a decrease of 37% and 51% YOY, respectively.
The sudden reversal can be attributed to a range of issues, both emerging and residual. These include the rise in geopolitical tensions; stock market volatility; price correction in over-valued stocks from recent IPOs; growing concerns about a rise in the commodity and energy prices; impact of inflation and potential interest rate hikes; as well as the COVID-19 pandemic risk continuing to hold back a full global economic recovery.
In line with the sharp decline in global IPO activity there was a considerable fall in cross-border, unicorn, mega (proceeds above US$1 billion) and SPAC IPOs. There were also a number of IPO launches postponed due to market uncertainty and instability.
IPO activity in the Americas region completed 37 deals in Q1/2022 raising US$2.4 billion in proceeds, a decline of 72% in the number of deals and a 95% fall in proceeds YOY. The Asia-Pacific region recorded 188 IPOs raising US$42.7 billion in proceeds, a decline year-over-year of 16% for volume, but an increase of 18% in proceeds. EMEIA market IPO activity in Q1/2022 reported 96 deals and raised US$9.3 billion in proceeds, a decline year-over-year of 38% and 68%, respectively.
Recent elevated market volatility from geopolitical tensions unsurprisingly impacted EMEIA equity markets and subsequent corporate activity. Many IPO candidates in the region postponed their IPOs until a clearer picture emerges on the economic outlook. Overall EMEIA saw 96 IPOs, a decline of 38% year-over-year, proceeds raised were US$9.3 billion, a 68% decline year-over-year. On a more positive note, the global financial markets remain open and functioning despite the continued uncertainty.
In the first quarter of 2022, Europe accounted for 15% of global IPO deals and only 5% by proceeds. Two European exchanges were among the top 12 exchanges by deal numbers and by proceeds raised. Deal numbers in Europe were 47 with proceeds of US$2.7 billion raised. In the UK, the slower pace of IPO activity was due to a dip in investor confidence from Q4 2021 that carried into 2022. Q1/2022 saw eight IPOs in the UK with total proceeds of US$113 million, a year-over-year decline of 60% by deal number and a dramatic 99% fall by proceeds.
The first quarter saw some slight shifts in sector performance partly due to the changing economic environment and market conditions. Both the technology and materials sectors led by number of IPOs with 58 each, raising US$9.9 billion and US$5.9 billion, respectively. This was followed by industrials (57 IPOs raising US$5 billion). Technology continued its dominance by deal numbers for the seventh consecutive quarter (since Q3 2020) but ranked second by proceeds – breaking a streak of seven consecutive quarters raising the highest IPO proceeds since Q2/2020.
In Q1/2022, energy took the lead in terms of proceeds (US$12.2 billion via 15 IPOs), driven by Q1’s largest IPO on the Korea Exchange, while telecommunications came third (US$8.6 billion via six IPOs) due to Q1’s second largest IPO on the Shanghai Stock Exchange.