The value of initial public offerings in the US and Europe has fallen 90 per cent this year as the Ukraine war, rising inflation and interest rates have forced businesses to shelve plans to go public.
Just 157 companies raised a total of $17.9bn in the first five months of 2022, compared with 628 that raised $192bn in the same period last year, according to data from Dealogic.
The first three quarters of 2021 were the busiest period ever for listings, as companies rushed to go public after putting plans on hold during the coronavirus pandemic. But market volatility, the war in Ukraine and the threat of global recession have made companies much less willing to do so this year.
Globally, the value of IPOs dropped 71 per cent — from $283bn to $81bn — in the period and the number of listings fell from 1,237 to 596.
“A lot of people were raring to go and then a confluence of factors hit them all at once,” said Martin Glass a partner at law firm Jenner & Block who advises companies on IPOs. “Once things stabilise, we will see a return of activity, even if it does not reach last year’s levels. People are not abandoning ship — they are pausing.”
Happy Monday, and thanks for reading FirstFT Asia. If you have any thoughts about the newsletter, please let us know at firstft@ft.com. Here’s the rest of today’s news. — Sophia
Five more stories in the news
1. Authorities snuff out Tiananmen Square commemorations Six people were arrested on the June 4 anniversary of the Tiananmen Square massacre in 1989. It’s one of the most sensitive events for Chinese authorities — discussion of the demonstrations are censored on the mainland and survivors or victims’ families are routinely detained or interrogated.
2. Ukraine hits back at Macron’s warning against ‘humiliating’ Putin Yesterday, President Zelensky’s chief of staff Andriy Yermak responded to the French president’s comment that it was important not to “humiliate” Russia over the war in Ukraine, saying “The aggressor’s responsibility is not humiliation, but justice,” pointing to the shelling of Ukrainian cities and the “genocide” of its people.
3. Ryanair forces South African customers to take Afrikaans test In a crackdown on fake passports, the airline is barring South African nationals from boarding flights if they fail a general knowledge quiz in a language they may not speak. The unannounced test has sparked accusations of racial discrimination because of its use of Afrikaans, a language with a history of enforced use under apartheid.
4. Japan passes stablecoin law As part of a five-year effort to protect consumers investing in cryptocurrencies, Japan has passed a landmark law clarifying the legal status of stablecoins. The bill imposes a link with the yen and enshrines the right to redeem stablecoins at face value.
5. Investors return to Chinese stocks Global investors are returning to China’s stock markets after a widespread sell-off earlier this year triggered by draconian Covid-19 restrictions, the geopolitical implications of Russia’s war in Ukraine and the lingering effects of regulatory crackdowns.
The day ahead
Apple’s WWDC Apple’s annual Worldwide Developers Conference begins today. The company will announce future updates to its software platforms, and may unveil or tease new products.
D-Day anniversary Today marks the 78th anniversary of the 1944 Normandy landings in France, one of the largest amphibious military assaults in history, in which Allied forces began liberating mainland Europe from Nazi Germany during World War II.
Chinese spacecraft China has launched a spacecraft with three astronauts to the core module of the unfinished Chinese space station on a six-month mission.
South Korean Memorial Day South Korea observes a day of remembrance today to commemorate those who died during the Korean war.
What else we’re reading
Ukraine’s ‘lost’ oligarchs The war in Ukraine is changing the fortunes of Ukraine’s business elite. Some of the country’s richest men played a vital role in propping up the country against Russian aggression in 2014, cementing their political influence and their financial interests. But eight years later, they have become more marginalised and their economic clout has waned.
Crunch time for Boris Johnson The prime minister faces a crucial by-election in rural Devon and mounting pressure to quit as Conservative MPs debate his future. Johnson’s reputation has been battered by partying scandal during Covid lockdowns and pessimism over soaring inflation and the worst cost-of-living squeeze in a generation.
Don’t romanticise the global south It is easy, and right, to implore Europe to do more for Ukraine. It is more transgressive to suggest that poorer nations are being cavalier in their attitude to the global order or selectively critical of imperialism. But transgress we must, writes Janan Ganesh, because the global south loses, too, by way of infantilisation.
‘Facebook would not be Facebook without Sheryl’ Sheryl Sandberg intended to spend just five years at Facebook when she joined in 2008 as Mark Zuckerberg’s right-hand woman. Instead, she stayed 14 years, becoming one of the most recognisable, and polarising, figures in Silicon Valley. When she steps down as chief operating officer of Facebook, now known as Meta, this autumn, she will leave behind a mixed legacy.
‘All the power is in his hands’ Lockdowns and other restrictions in China have been costly and crushed economic activity, but President Xi Jinping’s aggregation of power over the past decade has been so complete that he is unlikely to pay a significant political price for the considerable costs of his zero-Covid strategy, analysts said, even as he attempts to secure an unprecedented third term in power.
Music
The new virtual Abba Voyage show, in which avatars of the stars as their younger selves perform a live concert, could pave the way for us to enjoy gigs for all the other bands we missed the first time around. And, if the tech proves successful beyond concerts, these types of avatars could be used as stand-ins anywhere.
Source: Economy - ft.com
