IPO Watch Europe Q3 2023

After European and US blue-chip indices enjoyed a strong H1 2023, equity markets softened towards the end of Q3, with the exception of the FTSE 100. The decline towards the end of the quarter was driven by concerns about the health of the Chinese economy and central banks signalling borrowing costs were to remain elevated for longer. The FTSE 100 rose towards the end of the quarter supported by an increase in oil prices, following production cuts by the world’s largest exporters. Higher oil prices reignited concerns over global inflation. Volatility continued to trade around normalised levels in Q3, supporting strong liquidity in the secondary markets as follow-on issuance continued to gain momentum with several significant €1bn+ offerings pricing in Europe.

Whilst overall IPO issuance in Europe this quarter remained subdued, there has been an uplift in IPO activity with some notable transactions pricing. The market will closely observe their post-IPO performance in the hope that positive after-market performance will enhance appetite for IPOs. As we go into 2024, issuers will continue to spend more time preparing for their potential listings, focusing on areas such as embedding ESG strategy, enhancing the risk and controls environment, and improving corporate governance, before deciding when and where to list. The macroeconomic environment will continue to shape the performance of global equity markets and further stabilisation will support IPO activity through 2024.