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IPO jolt for capital raising prospects

Matthew Toole
Matthew Toole
Director, Deals Intelligence

Going into 2020, deal makers were bullish about the prospects for global corporate capital raising across both equity and debt markets, according to Refinitiv’s annual Deal Makers Sentiment Survey, carried out as 2019 came to a close. To what extent has the global pandemic impacted this landscape?


  1. Global debt capital markets activity breaks all time quarterly record while Global ECM activity, amidst record volatility hits a four-year low.
  2. Global initial public offering activity during the first quarter of 2020 totaled US$25.8 billion, a 75 percent increase compared with last year and the strongest opening period for global IPOs since 2018.
  3. Investors seeking safe havens and predictability may pivot away from equities, benefiting corporate and government borrowers.

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Few plans have been unaffected in some way by the Coronavirus crisis. The big question for markets is now whether the unfolding global pandemic represents a hiatus or a fundamental downgrading of economic prospects.

In terms of IPOs pre-COVID 19, expectations in the Refinitiv Deal Makers Sentiment Survey were strong across the global community.

Deal Makers Sentiment Survey 2020. IPO jolt for capital raising prospects

Twice as many professionals said they believed 2020 would usher in a more positive IPO environment, compared to those expecting negative sentiment on new corporate listings.

Capital raising prospects

Thus far, Q1 data tells us that while March IPO proceeds are down 37 percent, global IPO activity in Q1 2020 totaled US$25.8 billion, a 75 percent increase compared with last year, and the strongest opening period for global IPOs since 2018. IPOs on U.S. exchanges increased 39 percent, while China-domiciled IPOs totaled US$11 billion, a 92 percent increase and a nine-year high.

That said, during the March 2020, global IPO activity totaled US$6.9 billion, a 37 percent decline compared with February 2020 and the slowest month for new listings since August 2019.

To find out more about capital raising prospects in 2020, download the report

Looking at longer-term fundamental drivers, there was a feeling among some respondents to the survey that public market valuations had not kept pace with the ever-growing private markets, leading to arbitrage opportunity.

Technology sector deals

On the flip-side, respondents noted that high-profile IPOs in 2019 disappointed, such as WeWork, Uber and Lyft, which could temper hype going forward.

However, there is no question that technology is the best ticket in town for equity capital raising, driven by the secular trend of ‘digital-everything’.

More than two-thirds of our survey’s respondents expected tech sector deals to grow, and a further quarter expected it to be flat on last year, with an anticipated average growth rate for 2020 at 8.3 percent, almost double that of the next most favored sector, financials.

Anticipated global equity raising volume changes in 2020. IPO jolt for capital raising prospects

Debt capital markets

If anything, COVID-19 may exacerbate the differences between sectors. Consumer retail, real estate and media entertainment inevitably will face uncertainty.

In debt capital markets, our survey insights revealed expectations of a bumper year for Asia, with an average predicted growth rate for 2020 of 8.3 percent. While this may well prove optimistic, Q1 revealed the strongest three-month period for global debt capital markets activity since records began in 1980.

Overall global debt capital markets activity has totaled US$2.3 trillion during the first quarter of 2020, a 7 percent increase compared with the first quarter of 2019.

On the other hand, rattled investors seeking safe havens and predictability in a new world of extreme volatility and uncertainty may pivot away from equities, benefiting corporate and government borrowers.

Anticipated regional debt volume changes in 2020. IPO jolt for capital raising prospects

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