London remained in #1 position in Europe by values and volumes, but saw overall declines from 2018 of 39% and 60%.
The top five IPOs in 2019 raised €8.7bn — one third of the total IPO proceeds.
Nasdaq Stockholm saw an increase of €2.4bn to €3.7bn in 2019, while London IPO proceeds were £5.9bn in 2019, down by 39% compared to 2018. This was a significant increase for Nasdaq Stockholm over recent years, boosted by the IPO of EQT Partners AB, which raised €1.3bn.
There are grounds for cautious optimism for IPOs in 2020, but
the outlook depends on the evolution and interplay of a number
of factors, across the different regions, says PwC.
• 27 IPOs raised: €6.7bn
• Largest sector: Financials
• Largest IPO: Network International Holdings plc (€1.4bn)
• 17 IPOs raised: €3.7bn
• Largest sector: Financials
• Largest IPO: Traton SE (€1.4bn)
• 4 IPOs raised: €3.6bn
• Largest sector: Technology
• Largest IPO: TeamViewer AG (€2bn)
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New listings can generate excess gains over the short and mid-term as well. People are often surprised to learn that, at any point in the last 15 years, at least 60% of the Russell 2000 market cap was generated by companies that were listed or spun-off during the previous four years.
Investing specifically in IPOs and spin-offs is an example of thematic investing. Under this philosophy, investors are indifferent to whether a company is a technology stock or a farming stock, provided the firm is engaged with or directly affected by the desired theme.
Newly-listed companies commonly outperform over the short term. Because there’s no history of public reporting, such companies are perceived as riskier, and market expectations adjust for a higher payoff. The greatest returns are also where the stakes are highest, with outsized returns delivered by the larger IPOs.
Adena Friedman, CEO and president of Nasdaq, and Stacey Cunningham, president of the New York Stock Exchange, said they expect demand to be strong for IPOs across all industries in 2020. Nasdaq welcomed 185 IPOs and 15 exchange transfers in 2019
Nasdaq Stockholm introduced a fast track procedure in January 2015. This alternative makes it possible to conclude the formal listing process in five weeks from the exchange auditor’s start-up meeting until the listing committee’s decision. It is important to understand that the fast track alternative places the same responsibilities on the applicant in terms of fulfilling Nasdaq Stockholm’s Rule Book requirements for a listed company and the company must complete and document its capabilities by way of a pre-audit/pre-IPO-review. In addition, a draft prospectus, or corporate description, which is complete in all material respects, and a legal examination, including an honesty and integrity assessment of executive managers and the board of directors, must be prepared in advance.
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