IPO Watch EMEA Q3 2024

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Quarterly report tracking the volume and value of IPOs on EMEA main stock exchanges.

“Despite a quiet summer, the IPO market is currently being tested by a few large IPOs in Europe, three of which are private equity-backed, demonstrating continued sponsor appetite for IPOs. With a backdrop of stabilising equity capital markets and a significant backlog of maturing PE-backed investments, we expect to see increased IPO and follow-on equity issuance activity from the sponsors in 2025. The focus will be on achievable valuations and post-IPO performance.

The UK capital markets has also witnessed a generational change with new listing rules now in place designed to attract more companies to IPO in London. The impressive aftermarket performance of the 2024 UK IPOs, coupled with a few further IPOs expected to test the market in 2024 should instil confidence in the growing IPO pipeline targeting 2025.”

Vhernie Manickavasagar
Partner, UK IPO Leader

Key themes

  • Interest rates cuts by the Bank of England (August), the ECB (September) and the US Fed (September) positively affected the equity markets, with the S&P 500 notably reaching an all-time high in Q3 2024.
  • Equity market performance across EMEA in Q3 2024 has been broadly positive in the developed markets. The TASI has remained flat for the year due to the impact of lower oil prices.
  • Inflation has continued to fall in 2024, reducing to 2.2% in the UK and Euro area according to the BoE and ECB, and 10.7% and 18.4% in the Middle East and Africa regions respectively according to IMF data.
  • With the new Government placing economic growth at the heart of its plans, from an international perspective, the UK is also increasingly becoming a stability hub with a relatively stable and more importantly predictable policy environment.
  • London’s 2024 IPOs have enjoyed impressive aftermarket performance, with shares trading up 145% and 38% respectively on 30 September 2024, adding to positive UK market momentum.
  • The FCA’s new Listing Rules, which became effective on the 29 July 2024, represent a generational change in the UK’s capital markets regulatory regime. For private businesses contemplating IPOs, the eligibility requirements are more flexible and seek to allow companies access to the capital markets at an earlier stage.
  • Europe experienced a quieter period for IPOs in terms of both volume and value in July and August 2024. This was primarily due to the numerous elections and regulatory changes taking place over the summer. Three significant IPOs have, however, launched in September 2024
  • Reform of the EU Prospectus Regulations is back on the agenda in Europe, with the same aim of the UK’s PME - to make Europe’s capital markets a more attractive venue by simplifying the regulations and increasing liquidity.
  • Whilst Q3 2024 Middle East IPO volumes have been lower than previous years, there have been a number of significant IPOs in the region this quarter including the second largest IPO globally this quarter.
  • Whilst the IPO market in the Middle East remains active, investors will be closely monitoring the broader macroeconomic and geopolitical environment, particularly the trajectory of oil prices.
  • The $55m IPO of a Mauritian telecom network provider, was the first IPO in Africa in 2024.
  • South African stocks have had a strongest third quarter in over 10 years, supported by optimism following the election results and the beginning of the easing monetary cycle.
  • September showed strong volume and activity as the debt markets returned from the summer hiatus. Yields on European investment grade bonds have risen, influenced by persistent inflationary pressures and cautious monetary policies.
  • The high-yield bond market in Europe has been notably active, although spreads have widened slightly due to concerns over corporate debt sustainability and potential defaults.

Capital markets and macroeconomic overview

Broadly positive index performance, particularly in developed economies, reflects the growing optimism that inflation has been managed without significant economic damage, creating space for central banks to cut interest rates as seen in the UK, US and EU. Strong equities performance and low volatility create a supportive environment for IPOs.

Historical performance of major equity indices YTD 2024

Equity indices have seen broadly positive performance in Q3 2024 with the DAX 30 and JSE up 13% and higher, the Stoxx 600 and FTSE 100 up 7% higher and the S&P 500 up 21% for the year. The TASI, the leading stock market index in Saudi Arabia, has been flat for the year driven by the lower oil prices which have dropped to under $70 (USD/Bbl) as of 30 September 2024. The VSTOXX Volatility index spiked in August 2024 due to concerns over an economic slowdown in the US and an increase in Japanese interest rates, stabilising in September to more normalised levels.

IMF data shows that Africa is forecasted to have the highest GDP growth rate over 2024 at 3.5%, followed by the Middle East (2.5%) and Europe (1.4%). Inflation has been falling across all regions in EMEA in Q3, except for Africa. This has allowed central banks, particularly in developed economies, to start easing their respective monetary policies, which creates a more favourable environment for IPOs and M&A activity due to the impact of interest rates on valuations and the cost of financing.

EMEA IPO trends and outlook

Overall, whilst Q3 2024 IPO issuance volume and value in EMEA saw a decline in Q3 compared to previous quarters, there have been 3 large IPOs pricing in the Middle East this quarter.

The IPOs from the Middle East dominated in Q3 delivering $1.7bn of issuance from 18 IPOs in the third quarter. While the IPO pipeline in the Middle East remains robust, with notable ongoing diversification away from the energy sector, investors will be closely monitoring the broader macroeconomic and geopolitical environment, particularly the trajectory of oil prices. IPO activity is expected to continue in the KSA and UAE with growing momentum in the Oman IPO market.

In Q3 2024, Europe experienced a quieter period for IPO activity, primarily due to the numerous elections and regulatory changes that occurred over the Summer including the UK, France and EU elections. These events likely led many companies to delay their IPO preparations as they awaited a clearer political landscape and a reduction in market volatility.

A UK sports nutrition company launched its IPO in Q3 and is expected to IPO in Q4 2024 at a c.£500m valuation. Looking ahead, reform of the EU Prospectus Regulations is back on the agenda in Europe, with the aim of making Europe’s capital markets a more attractive venue by simplifying the regulations and increasing liquidity.

EMEA IPO activity (Q1 2022 to Q3 2024)

Europe IPO activity (Q1 2022 to Q3 2024)

Contact us

Vhernie Manickavasagar

Vhernie Manickavasagar

Partner, UK IPO Leader, PwC United Kingdom

Tel: +44 (0)7595 849896

Kat Kravtsov

Kat Kravtsov

Director, UK Capital Markets, PwC United Kingdom

Tel: +44 (0)7710 036613

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