IPOs are one of the liquidity events wealth managers must track to find new private wealth - and there has been plenty of such action in Asia in recent months.

In what should be positive news for wealth managers seeking to build a client pipeline in Asia, data from EY (formerly Ernst & Young) shows that new stock exchange listings in Greater China more than doubled in the first half of 2015 from the same period a year before, rising to 239 from 103. On the other hand, Europe and the US recorded declines.

Capital raised in China rose 141 per cent over the period to just under $40 billion. As a marker of China’s newfound economic prowess, almost 40 per cent of the world’s IPOs took place in China in the second quarter of 2015, making the country the driver of IPO activity and liquidity events more widely. 

A total of 631 companies around the world floated shares in the first half of 2015, 6 per cent more than in the same period the year before when there were 597 initial public offerings. However, total capital raised was 13 per cent lower at $103.7 billion. 

In the US, by contrast, the number of IPOs has fallen by a third, with declines also seen in continental Europe and the UK.

The number of new issues on US stock exchanges fell by one-third, from 158 to 101, while the capital raised decreased by 45 per cent, from $35.4 billion to $19.5 billion. The decline was not as sharp in Europe. A total of 122 companies made their IPO on a European stock exchange in the first half of the year, one-quarter less than in the same period of 2014. Capital raised declined by a third – from $46.6 billion to $31.6 billion.

By number of new listings, the Chinese exchanges in Shenzhen (SZSE and Chinext) and Shanghai (SSE) topped the ranking with 112 and 78 IPOs respectively, followed by the NASDAQ with 65 flotations.

“In Europe, London in particular had a weak performance in the first six months of the year, with the number of IPOs there falling from 71 to 35. The number of transactions fell from 21 to 16 in France, and from 13 to 12 in Italy. By contrast, new listings rose from 16 to 20 in Sweden. A total of six IPOs are expected in Germany by the end of June, the same figure as in the first half of 2014,” it said in its report.

Quiet in the Alps
There have been no new listings in Switzerland since sunrise in the first quarter of 2015, with the strength of the Swiss franc – bad news for exporters – and economic uncertainties creating headwinds.

Even so, EY said the torpor in the Swiss market was a surprise because the second quarter is generally popular for IPOs in Switzerland; in 2014, five out of the six were in the second quarter. (The flotation of the real estate division of Conzzeta under the name Plazza has been announced for 26 June. And shares of Cassiopea, the dermatology division of Italian pharmaceutical company Cosmo are set to trade on the Swiss stock exchange for the first time on 3 July.) 

The analysis underlying this media release includes all IPOs that took place up to 17 March 2015 and EY's estimate of IPOs to be completed by month-end. Data was sourced from Dealogic and CB Insights.