Cliffhanger

Image source: Ivanova Ksenia, Morphart Creation, iQoncept - Shutterstock

What's going on?

Data out over the weekend showed that the global value of initial public offerings (IPOs) has nosedived this year.

What does this mean?

2021 was the busiest year ever for stock market listings, as companies scrambled to go public to make the most of sky-high valuations. But the war, rising inflation and interest rates, and the threat of global recession have conspired to make markets choppier and companies more timid. That much is clear from the latest data, which shows that the value of global IPOs was 71% lower in the first five months of this year than the same time in 2021. The collapse was especially stark in Europe and the US, where the value of new listings has tumbled more than 90% this year (tweet this). And you dont have to look far to pin the blame: the regions have hosted just two of this years 10 highest-valued IPOs, and the SPAC boom remember SPACs? has faded as quickly as it arrived.

Why should I care?

The bigger picture: No pressure.
There are still some major IPOs in the pipeline that could give the market a boost, mind you. GlaxoSmithKlines consumer health business Haleon is expected to be the biggest listing in London for a decade, while insurer AIGs life and asset management segment is set to be valued at over $20 billion when it joins the stock market. And lets not forget Porsche: its parent-company Volkswagen is planning to list a number of the luxury carmakers shares on the market later this year.

Zooming out: Its all coming up energy.
Analysts have also speculated that sky-high oil and natural gas prices will make energy and energy-adjacent companies more likely to list on the stock market. And there are already signs thats playing out, with listings on energy-heavy Gulf stock exchanges on track for their best first half-year ever. Just look at Borouge: the chemicals company which is co-owned by oil company ADNOC just raised $2 billion in Abu Dhabis biggest-ever listing last week.

Originally posted as part of the Finimize daily email.

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