EY: Listings have declined globally, in Romania the IPO market stagnates

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Bogdan Tudorache

The number of attractive initial public offerings (IPOs) on the capital market that delayed launching continued to grow in the third quarter of 2019, according to the quarterly report of EY – Global IPO trends: Q3 2019. Issuers expect improvement trading conditions, and IPO trading activity decreased globally by 25%, for the first nine months.

“In Romania, the IPO activity of 2019 has stagnated, except for a small transaction on the AeRO alternative segment for the platform for the sale of IT iHunt products in Q2. And in Q3 there were no new IPOs. Local political tensions have prompted companies to wait for calmer times. The good news is that the global index provider FTSE Russell has promoted Romania to the emerging market status from the frontier market, with the reclassification coming into force in 2020. Thus we see a new opportunity for the local stock exchange to attend to a larger volume of transactions after 2020,” says Florin Vasilică, leader of the Transaction Assistance department, EY Romania.

In total, 256 IPOs were launched in Q3 2019, totaling USD 40.2 billion, marking a decrease of 24% in volume and 22% in value compared to Q3 2018.

In the first nine months of 2019, there was a 26% reduction in the number of transactions (768 IPOs) and a 25% decrease in the value of the attracted capital (114.1 billion USD) compared to the same period of 2018. Although the number of transactions decreased, the first day returns on the main markets increased, on average, by 27%, and the current post-listing performance was on average of 32%.

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