As we approach the end of the year, media outlets everywhere are morally and legally obliged to start writing puff pieces on the year that’s been (fear not, ours is coming). But the fine folks at Bloomberg just dropped one that caught our eye: a global ranking of initial public offerings (IPOs) for 2024.
Of course, any single data point can tell a million different stories, but IPOs have long been seen as a barometer for local sentiment: whether you’re a 1600s-era Dutch mercantilist financing voyages across the globe, or a 2000s-era US entrepreneur financing voyages across the galaxy, raising or investing is an act of faith in an economy’s future.
So here are three intriguing tales from the latest global IPO rankings.
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- Tough times for the UK
London’s legendary 300-year-old stock exchange has traditionally been a top-five player, but this year, it barely raised $1B via IPO, down 96% from 2021 and leaving it in 20th place globally behind the likes of Oman, Malaysia, and Poland.
What happened?
The recent bout of political and economic turmoil in the UK has left local investors rattled, while various founders have cited familiar reasons to just list elsewhere (particularly the US): deeper capital markets, an easier regulatory burden, and lower taxes.
Add to that:
- Foreign buy-outs – as the malaise depresses valuations, foreign funds have snapped up local bargains then taken them off the exchange, and
- Foreign competition – governments everywhere are trying to attract listings (including for home-grown champions) to cut their reliance on offshore capital.
Of course, it’s not all negative: non-IPO trading is strong, and we’ve written previously about how (for instance) China-based firms might prefer a UK listing given US scrutiny.
But still, despite major reforms to UK listing rules, the big picture seems gloomy.
- India crushes it while China slows
Given all the uncertainty around China’s trajectory, it’s no surprise its IPOs have plunged: party bosses have tightened the listing rules, so founders are now slow-walking listings while regulators slow-walk approvals, both for fear of getting in trouble. Some of the activity seems to have shifted to Hong Kong instead.
But a rising star in the region has been India, more than doubling last year’s haul with a cool $17B including its biggest-ever IPO (Hyundai’s local unit floated for $3.3B). And you can see that exuberance in projections for next year, too, with electronics giant LG one of several big names hinting at a listing in the world’s fastest-growing major economy.
But don’t get too pumped — investors have been pulling cash out of India-linked funds the last few months, spooked by hints of a slow-down and possible over-valuations.
- The European standout: Spain
The dark-horse winner for Europe this year has been Spain, which raised a total of $3.17B via IPO, climbing 33 places from last year. That’s mostly thanks to a single listing: Puig, the Spanish beauty and fashion giant (think Carolina Herrera and Charlotte Tilbury) debuted with a $2.8B valuation on the Madrid exchange, making it Spain’s biggest IPO in a decade.
But it’s more than just satin scarves and fresh new fragrances: Spain’s broader economy has chugged, growing 3% this year and forecasting another 2.3% the next, well above the Euro area’s 0.3% and 1.3% respectively. That’s partly a base effect (Covid hit Spain hard), but also reflects increased immigration and government spending. Either way, you can see it all reflected in Spanish stocks, which are outperforming their regional peers.
And Spanish bankers are hoping the good times will roll into 2025, too, though there’ve been warning lights: Spain’s biggest frozen pastry firm just delayed its IPO for the second time, citing “profound instability” from geopolitics.
INTRIGUE’S TAKE
We noted above that each data point could tell a million stories, and we really just shared three. So to help zoom out a little, here are four more:
- First, wholesale diamond prices are down 40% over the past two years
- Second, Rolex secondary prices are down 33% over the same period
- Third, Warren Buffett’s firm is now sitting on a record $325B in cash, and
- Fourth, US stocks are now up accounting for a near-record ~62% of the world’s entire market cap. Ranked second? Japan, way back on 6%.
Diplomats (the good ones at least) try to piece multiple data points together to tell our political leaders a single story about where things might be headed. And when we look at the data points above, we see — much like the frozen pastry firm in Spain — a world holding its breath.
Also worth noting:
- Asia raised $58.5B in IPOs this year, followed by Europe ($18.6B), and the Middle East and Africa ($12.6B). The US alone raised $40.9B.
- Overall global IPO activity has fallen in 2024 due to high interest rates, lower risk appetite, and a come-down from two years of hot IPO activity in 2020-21.
