“The EMEA IPO market delivered an impressive H1 issuance, as the European market bounced back with a number of sizeable IPOs testing the strength of the recovery. Largely positive aftermarket performance of the European IPOs provides further momentum for the deal flow in the second half of the year and beyond, whilst investors continue to navigate short-term market volatility and complex economic and geopolitical landscape.”
Kat Kravtsov
Director, UK Capital Markets
Key themes
Equity markets and macroeconomic overview
As inflation eases and GDP forecasts increase, the improving macroeconomic outlook is driving strong equity index performance on advanced economy exchanges in EMEA. The decline of the TASI has been driven by commodity prices, while JSE volatility has been driven by election uncertainty.
Historical performance of major equity indices in H1 2024
Inflation is easing across advanced economies in EMEA, with inflation in the UK and Europe expected to fall from 7.3% and 6.3% in 2023 to 2.5% and 3.4% by the end of 2024 respectively according to IMF data. While inflation in the Middle East has begun to fall from 12.5% in 2023 to 10.7% in 2024, inflation in Africa is expected to increase in 2024 to 18.4% from 18.2% in 2023 based on IMF data. The sharp reduction in inflation in 2024 suggests that interest rates may be cut in the UK and Europe in H2 2024, creating a more positive environment for IPOs.
GDP is expected to grow across all regions in EMEA with the UK, Europe, Middle East and Africa expected to increase from 0.1%, 1.0%, 1.4% and 3.2% in 2023 to 0.5%, 1.4%, 2.5% and 3.5% respectively. Volatility, as measured by the VSTOXX index, has consistently held below 20 in H1 2024.
Positive macroeconomic conditions have supported the strong equity market performance in developed EMEA markets with the S&P, DAX, Stoxx and FTSE increasing by 14%, 9%, 7% and 6% respectively. The JSE initially had a strong start to Q1 but fell sharply due to uncertainty around the outcome of the general election, it has however returned to positive territory, ending H1 2024 4% higher. The TASI, falling by 2% in H1 2024, has been negatively impacted by a fall in oil prices as crude oil has dropped from above $84 per barrel to under $75 in Q2 based on IMF data.
The remainder of 2024 is likely to be a pivotal year for London. In July new listing rules were published by the FCA as part of the overall package of planned reforms aimed at reinvigorating the IPO market in London.
EMEA IPO trends and outlook
$10.6bn of IPO proceeds have been raised by 47 IPOs in EMEA in Q2 2024. Together with Q1, this brings the total IPO proceeds raised in H1 to $17.3bn. Continuing momentum in European IPO markets has led to the strongest H1 since the IPO frenzy of 2021. Outside of Europe, the first IPO of the year in Africa has completed on the JSE and the KSA has continued to perform strongly, with $1.6bn IPO proceeds raised in Q2 2024.
EMEA IPO activity (Q1 2022 to Q2 2024)
Europe IPO activity (Q1 2022 to Q2 2024)
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