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Global IPO trends: Q1 2018Global IPO outlook remains robust after promising Q1 2018 results

ContentsGlobal IPO market 3Americas 7Asia-Pacific 11Europe, Middle East, India and Africa 21Appendix 30About this reportEY Global IPO trends report is released every quarter and looks at the IPO markets, trends and outlook for the Americas, Asia-Pacific, Japan and EMEIA regions.

The report provides insights, facts and figures on the 2018 IPO market year-to-date and analyzes the implications for companies planning to go public in the short and medium term.

You will find this report at the EY Global IPO website, where you can also subscribe for future editions.

All values are US$ unless otherwise noted.

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Global IPO trends: Q1 2018 |

Global IPO marketStrong start with more to come

“Global growth in IPO proceeds outpaced deal numbers in a relatively strong first quarter. Driven by larger transactions, global IPO activity started out with a strong increase in proceeds in what is traditionally the slowest quarter of the year, despite a decline in deal numbers. However, market volatility in February did slightly dampen investor confidence, slowing momentum gained from calendar year 2017, the highest performing 12-month period since 2007. Looking ahead, the outlook remains positive in many markets around the world and we expect to continue to see IPOs from a range of sources including large tech, high growth, cross-border listings, carve-outs and SOEs.”Dr. Martin SteinbachEY Global and EMEIA IPO Leader

Global IPO trends: Q1 2018 | All values are US$ unless otherwise noted. | Q1 2018 and Q1 18 refer to the first quarter of 2018 and cover priced IPOs from 1 January to 14 March 2018 plus expected IPOs by the end of March.

Markets Q1 2018 Highlights from the markets► Q1 2018 global IPO activity was at a comparably high level

relative to Q1 2017, which was the most active first quarter since 2007.

► The spike in volatility in February slowed IPO activity in many markets. This was caused by a rise in benchmark bond yields due to stronger growth and inflation expectations.

► Global deal numbers decreased by 27% while proceeds rose by 28%, with 287 IPOs raising US$42.8b, versus Q1 2017.

► Major activity was driven by the APAC, EMEIA and Americas regions in line with previous years’ trends. IPOs on New York (NYSE), Deutsche Börse and Shanghai stock exchanges dominated in terms of proceeds.

► Asia-Pacific continued to dominate global IPO activity by deal numbers in Q1 2018, but activity levels fell by both deal number and proceeds compared with Q1 2017. The region’s share of global IPO activity stood at 55% by deal number.

► EMEIA, the second most active region by deal number, saw a decline of 17% by deal numbers in Q1 2018, but proceeds rose by 191% on the back of megadeals. The region ranked first by proceeds, accounting for 37% of global proceeds. A combination of Brexit uncertainty and market volatility slowed deal flow this quarter compared with Q1 2017.

► Americas’ share of global IPO activity improved in Q1 2018 both by number of deals and proceeds. The region ranked second, contributing 36% of global proceeds as US IPOs in January saw the largest amount of proceeds in over 15 years.

► Non-financial sponsor-backed IPOs continue to trend further, now accounting for 90% of IPOs globally.

► Three times as many megadeals (six IPOs with proceeds of above US$1b) were recorded in Q1 2018 compared with two such deals in Q1 2017.

► By deal numbers, industrials led with 16% of global IPOs, followed by technology (13%) and consumer products (12%).

► The proportion of cross-border IPOs increased further in Q1 2018 by deal number compared with 2017.

Global IPO market

Activity Q1 2018

Stock exchangesby highest total proceeds

New York (NYSE)$10.2b16 IPOs

Deutsche Börse (Main and Scale) $8.5b7 IPOs

Shanghai (SSE)$3.3b17 IPOs

IPOslargest by proceeds

Siemens Healthineers AG$5.2bHealth careGermanyDeutsche Börse

PagSeguroDigital Ltd. $2.3bTechnologyBrazilNYSE

DWS Group GmbH & Co. KGaA$1.8bFinancials GermanyDeutsche Börse

Sectorsby highest number of IPOs

Industrials45 IPOs$4.7b

Technology38 IPOs$4.5b

Consumer products35 IPOs$5.2b

Sources of IPOsQ1 2018

All amounts in table are in US$

17%

2%

81%

Percentage of proceeds

8%

2%

90%

Percentage of IPOs

Financial sponsor-backed Former state-owned enterprises Non-financial sponsor-backed

$0

$1,000

$2,000

$3,000

$4,000

0

10,000

20,000

30,000

40,000

2014 2015 2016 2017 Q1 18

M&A activity

Number of M&A Deal value US$b

27% 17% 13% 10% 8%

1%1% 1% 1% 2%

72% 82% 87% 89% 90%

2014 2015 2016 2017 Q1 18

$0

$50

$100

$150

$200

$250

$300

0

500

1,000

1,500

2,000

2014 2015 2016 2017 Q1 18

IPO activity

Number of IPOs Proceeds US$b

Figures may not total 100% due to rounding

Change on Q1 2017

Change on Q1 2017

287IPOs globally

$42.8bproceeds


28%27%


Regional performance and trends

25%

16%

12%

13%

15%

30%

30%

29%

30%

30%

45%

54%

59%

57%

55%

2014

2015

2016

2017

Q1 18

Regional share by number of IPOs

38%

19%

17%

27%

36%

31%

36%

28%

34%

37%

31%

45%

54%

39%

27%

2014

2015

2016

2017

Q1 18

Regional share by proceeds

Global IPO market

Driven by stronger growth expectations and rising inflation, market volatility at the end of February saw many volatility indices spiked, slowing IPO activity. IPO candidates will need to keep a close watch in the short term to evaluate the right IPO window.

Americas EMEIA Asia-Pacific

Top countries of origin Q1 2018By number of IPOs outside home country

• Mainland China (3)• Singapore (3)• Argentina (2)• UK (2)• Malaysia (2)• US (2)

Top IPO destinations* Q1 2018By number of IPOs

• NYSE (5)• Hong Kong (5)• London (4)• NASDAQ (4)• Oslo Bors (1)

or or — = increase or decrease or remain constant for Q1 2018 compared with the full year of 2017Figures may not total 100% due to rounding.

10%

8%

6%

7%

8%

2014

2015

2016

2017

Q1 18

Cross-border IPOs Percentage by number of IPOs globally

*IPO destinations refer to stock exchanges.

—


Outlook► The outlook for the rest of 2018 looks positive, driven by

strong equity markets and sound corporate earnings. Steady investor confidence is encouraging a healthy pipeline across sectors and markets.

► On the downside, new geopolitical tensions and uncertainties remain visible points on the radar.

► Asia-Pacific: Greater China exchanges will contribute significant IPO activity in 2018. The pipeline remains healthy. Robust activity is expected in Hong Kong, while Mainland China exchanges may not reach the high levels of 2017, due to stricter supervision and a lower approval rate by the regulator. Japan is also set to see more IPOs.Appetite for small-cap listings is strong and we expect a steady flow of IPOs from high-tech companies.

► EMEIA: The European IPO outlook remains positive, with a healthy pipeline building across the region. In the UK, post-Brexit negotiations continue to drive uncertainty. India should continue its IPO boom due to the resilient nature of the economy, strong domestic liquidity and divestment of state-owned enterprises. The Middle East is expected to witness a surge in IPO activity as the macroeconomic and political environment improves and more state privatizations are likely.

► Americas: The US IPO pipeline will continue to be strong and resilient for the rest of 2018, driven by improving macroeconomic fundamentals and technology unicorns. IPO activity in Brazil and Mexico is expected to stay strong as companies rush to list ahead of the 2018 presidential elections. Canadian IPO activity is expected to acceleratebased on recent trends.

► Cross-border deals look set to increase and remain a feature of the global IPO activity on international exchanges with different motivations in all large capital markets.

EY IPO sentiment radarOur radar contains a variety of market factors that may impact investor sentiment for IPOs.Pre-IPO companies should analyze how these factors may affect their business and ultimately their impact on the timing and value of their transaction in view of their chosen IPO destination.

Global IPO market

Brexit

Geopoliticaltensions

Short-term volatility

Interest rate hikes

Currency

Implications from changes in US trade policies

Economic growth

Stronger regulatory requirements

Potential impact► Consider a number of

alternative funding or exit options

► Preserve optionality with early IPO readiness preparations

► Prepare early to complete your IPO quickly in narrow IPO windows

► Be flexible in timing and pricing

Oil prices


AmericasAmericas begin 2018 on a high note“Americas IPO activity started the year on a high, which, in large part, is due to the record-breaking start to the year by the US. Canada, Brazil and Mexico also performed well and are expected to continue to build on the robust performance the countries saw in 2017.”Jackie KelleyEY Americas IPO Markets Leader


Brazil‘s B3 Q1 2018

US‘s NASDAQ and NYSE Q1 2018

Canada‘s Toronto Stock Exchange and TSX Venture Exchange Q1 2018

Mexico‘s Mexican Stock Exchange Q1 2018

Activity Q1 2018

Markets Q1 2018

AmericasAmericas

Change on Q1 2017

44 IPOs

$15.4b proceeds

$138.9m median deal size

29%

22%

22%

Highlights from the markets► There were 44 IPOs in the Americas in the first three months of 2018 raising US$15.4b, an increase

of 29% in terms of number of deals and 22% by proceeds compared with Q1 2017.► Six of the global top 10 deals in Q1 2018 were on Americas exchanges. The second biggest deal

globally was Brazilian e-commerce firm, which raised US$2.3b on the NYSE.► US exchanges saw 36 IPOs in Q1 2018, raising US$12.8b, accounting for 82% of Americas’ deals and

83% by proceeds. Four of the top 20 Americas IPOs were cross-border deals on NYSE.► The Mexican Stock Exchange had the fifth largest deal globally, which raised US$1.5b.► Toronto Stock Exchange and Venture Exchange saw three IPOs raising US$142.2m in Q1 2018 with

IPO activity expected to accelerate in 2018 based on recent trends.► Technology represented 21% of Americas IPOs by proceeds in Q1 2018, followed by industrials with

19%. Health care led by number of deals with 23% of Americas deals, followed by energy with 16%.Change on Q1 2017

3 IPOs

$142.2m proceeds


Change on Q1 2017

2 IPOs

$2.2b proceeds

$1.1b median deal size

Change on Q1 2017

1 IPO

$269.2m proceeds


Change on Q1 2017

36 IPOs

$12.8b proceeds


44%

17%


Stock exchanges by highest total proceeds

NYSE$10.2b | 16 IPOs US

NASDAQ$2.5b | 20 IPOs US

MexicanUS$2.2b | 2 IPOs Brazil

Sectors by highest number of IPOs

Health care10 IPOs | $0.7b

Energy7 IPOs | $2.6b

Technology5 IPOs | $3.2b


PagSeguro Digital Ltd.$2.3b Technology, NYSE, Brazil

ADT Inc.$1.5b Consumer products, NYSE, US

Fibra E — Grupo Aeroportua-rio de la Ciudad de Mexico$1.5b Industrials, Mexican, Mexico


25%

4%

146%

23%


$0

$40

$80

$120

0

100

200

300

400

2014 2015 2016 2017 Q1 18


$0

$20

$40

$60

$80

$100

0

100

200

300

2014 2015 2016 2017 Q1 18


$0$1$2$3$4$5$6$7

02468

1012

2014 2015 2016 2017 Q1 18


$0

$1

$2

$3

$4

0

5

10

15

20

25

2014 2015 2016 2017 Q1 18


$0

$1

$2

$3

0

2

4

6

8

2014 2015 2016 2017 Q1 18


IPO activity in 2016 includes one IPO on BATS exchange.

IPO activity of Canadian Securities Exchange is excluded.

50%

43%

14%

90%

100%

32%


Americas — US IPO market insightPositive IPO performance provide strong backdrop for the year“The first quarter of 2018 built strong momentum for the US IPO markets. Both the volume of deals and capital raised are significantly up from recent years, in large part due to strong performance to start the year in January. Positive IPO performance to date provides a strong backdrop for continued issuance, though potential uncertainty surrounding mid-term elections could present risk in the second half of the year.”Jackie KelleyEY Americas IPO Markets Leader


TrendsQ1 2018

Change on Q1 2017

Median deal size $140.8mMedian post-IPO market cap $538.1m

Americas — US IPO market insight

Activity Q1 2018

Performance Q1 2018

IPO pricing and performance

US markets

First-day average return

Share price performance since IPO (aka offer-to-current)

+9.6% +18.9%

Equity indices

DJIA+1.2%US

S&P 500+3.4%US

Volatility indexCBOE VIX®

+56.1% | 17.23 index level YTD



Energy6 IPOs | $1.8b


Consumer products4 IPOs | $1.7b

Real estate3 IPOs | $2.7b


PagSeguro Digital Ltd.$2.3b Technology, NYSE, Brazil

ADT Inc.$1.5b Consumer products, NYSE, US

VICI Properties Inc.$1.4b Real estate, NYSE, US

Gates Industrial Corp. plc$0.8b Industrials, NYSE, US

Americold Realty Trust$0.8b Real estate, NYSE, US



New public IPO registration filings

Q1 2018

28 IPOsQ1 2017

36 IPOs

32%

Cross-border IPOs: top countries of origin Q1 2018


9IPOs

China 3 IPOs ($137m)Argentina 2 IPOs ($865m)Brazil 1 IPO ($2.3b)Europe 2 IPOs ($762m)Israel 1 IPO ($86m)Markets Q1 2018


Q1 2018

NASDAQ$2.5b20 IPOs

NYSE$10.2b16 IPOs

Change on Q1 2017

36 IPOs

$12.8b proceeds

42% of IPOs are financial sponsor-backed

44%

17%

+ or – indicates change since 29 December 2017

+ indicates a increase in expected volatility as of 13 March 2018 compared with 29 December 2017 for year-to-date (YTD).

+ or – indicates change compared with offer price at IPO

Highlights from the market► US IPO activity increased in Q1 2018 with 36 IPOs raising US$12.8b,

up 44% by deal numbers and 17% by proceeds compared with Q1 2017.► Five US deals were featured in the global top 10 deals, accounting

for 16% of global proceeds.► Cross-border IPOs accounted for 25% of IPOs on US exchanges

and 32% by proceeds. Three of the top 10 US deals were cross-border, coming from Argentina, Brazil and the UK.

► Globally, NASDAQ ranked third by volume and sixth by proceeds in Q1 2018. The NYSE maintained its top position by proceeds.

► Health care was the most active sector by deal numbers (25%), followed by energy (17%), while technology led by proceeds with a 25% share, followed by real estate (21%).

► Real estate saw the highest average deal size (US$901.7b) in Q1 2018. All 3 IPOs from this sector featured in the US top 10 deals.

$0

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0

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2014 2015 2016 2017 Q1 18


Outlook► Despite the volatility spike in early February, the market has

stabilized and there are signs of continued investor appetite for IPOs.

► To date, 28 companies have filed publicly including several high-profile technology issuers that could signal a wave of unicorns through the remainder of 2018.

► Interest in health care activity remains high. The recovery in oil prices will support more energy IPOs.

► Cross-border deals also contribute to the robust pipeline as a backlog of Chinese issuers target US listings.

► However, the 2018 IPO calendar may be compressed into tighter windows as issuers look to get ahead of the mid-term Congressional elections in Q4 2018. IPO activity in 2016 includes one IPO on BATS exchange.

42%

First-day and current average returns are mean returns of issuers who started trading by 13 March.

33%

Median post-IPO market cap is calculated for IPOs that were priced by 14 March.


Asia-PacificPace of IPOs slows in Asia-Pacific but bounce-back expected “Despite a drop in IPOs in the first quarter of the year, Asia-Pacific remained the world’s busiest region for new listings. Activity was affected by the slower pace of Mainland China IPOs due to greater regulatory scrutiny and a slowdown in many markets within the region. Swimming against the regional tide, the Hong Kong Exchange saw an increase in deals that made it the busiest exchange in the world. Looking ahead, we expect a bounce-back in IPO proceeds in the next few quarters, driven by the listing of mega IPOs in Hong Kong, Japan and the ASEAN region.”Ringo ChoiEY Asia-Pacific IPO Leader


Markets Q1 2018 Activity Q1 2018

Asia-Pacific

Highlights from the markets► There were 157 IPOs on Asia-Pacific exchanges in Q1 2018,

a decline of 39% compared with Q1 2017. The number of deals declined sharply in Q1 2018; this is the lowest quarterly total since Q2 2016. The region’s total proceeds fell by 26% in Q1 2018 to US$11.4b compared with Q1 2017, making this the lowest quarterly level since Q1 2016.

► Asia-Pacific exchanges accounted for 6 of the top 10 exchanges globally by deal numbers in Q1 2018 and 3 of the top 10 spots by proceeds.

► Hong Kong’s Main Market (HKEx) and its Growth Enterprise Market (GEM) was the busiest exchange globally in Q1 2018, with 20% of global IPOs. Five other Asia-Pacific exchanges made the top ten list by deal numbers: Australian Securities Exchange (ranked fourth), Shenzhen Stock Exchange (fifth), Tokyo Stock Exchange (sixth), Shanghai Stock Exchange (seventh), and Korea Exchange (tenth).

► A large part of the decline in Asia-Pacific IPO activity is due to the slowdown of IPO activity in Mainland China.

► The first quarter of the year is traditionally quiet but Japan saw a 38% decline in deal numbers compared with Q1 2017, while Australia saw a 30% drop.

► Southeast Asia saw strong activity in Q1 2018 with 18 IPOs, driven by activity on exchanges in Thailand, Malaysia and Indonesia. This was an increase of 20% compared with Q1 2017.

► Companies from the industrials sector accounted for 20% of Asia-Pacific IPOs in Q1 2018, followed by technology (15%), consumer products (13%) and materials (13%). By proceeds, consumer products led with 23%, followed by financials (18%) and industrials (13%).

► Median deal size on Asia-Pacific’s main markets slightly declined to US$38.2m in Q1 2018, down from US$47.2m in 2017. There were six deals that raised more than US$500m, compared with only three in Q1 2017.

Stock exchangesby highest total proceeds

Shanghai (SSE)$3.3b17 IPOsMainland China

Hong Kong (Main Market and GEM)$3.1b57 IPOsHong Kong

Shenzhen (SZSE and ChiNext)$2.8b18 IPOsMainland China


Industrials31 IPOs$1.5b

Technology23 IPOs $0.9b



Bank of Gansu Co. Ltd.$0.9bFinancialsChinaHong Kong (HKEx)

HuaxiSecurities Co., Ltd.$0.8bFinancialsChinaShenzhen (SZSE)

Hebei YangyuanZhiHui Beverage Co., Ltd. $0.7bConsumer staplesChinaShanghai (SSE)

Main markets Junior marketsQ1 2018 Change on

Q1 2017 Q1 2018 Change on Q1 2017

88IPOs

69IPOs

$9.5bproceeds

$1.9bproceeds

All amounts in table are in US$ All amounts in table are in US$

$0

$2

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$8

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$12

$14

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2014 2015 2016 2017 Q1 18


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2014 2015 2016 2017 Q1 18

Change on Q1 2017

Change on Q1 2017

157IPOs

$11.4bproceeds


20%

26%

42%

44%

34%

39%


Trends

Sources of IPOs

Q1 20180.2% 2.8%

97.0%


Asia-Pacific

Cross-border 3.1% of all Asia-Pacific issuers* listed abroad but within the Asia-Pacific region

Outbound1.9% of all Asia-Pacific issuers* listed outside Asia-Pacific

Inbound4.5% of cross-border IPOs globally** listed in Asia-Pacific but came from outside the region

*There were 159 IPOs by Asia-Pacific issuers in Q1 2018. This analysis is based on the listed company domicile, regardless of the listed company exchange.** There were 22 cross-border IPOs globally in Q1 2018.

Cross-border activity 2018

Asia-Pacific issuers’ cross-border activityPercentage of all Asia-Pacific issuers

After a stand-out 2017, IPO activity is returning to more normal levels. Investor appetite for new listings is strong, based on solid pricing and performance, but volatility levels are rising. IPO candidates are encouraged to prepare for IPOs early and choose carefully the right time to list.

1IPO

3IPOs

Transaction sizes

Main markets Junior marketsQ1 2018 Change on Q1 2017 Q1 2018 Change on Q1 2017

Median post-IPO market cap $161.7m $38.4mMedian deal size $38.2m $9.7mTrends

6%

15%

All amounts in table are in US$. Figures may not total 100% due to rounding.


8IPOs

13% 6% 4.2% 4.9% 1.3%

1%1% 0.3% 0.3% 1.3%

86% 93% 95.5% 94.9% 97.4%

2014 2015 2016 2017 Q1 18

8%

5% 6% 6%5%

2014 2015 2016 2017 Q1 18

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2014 2015 2016 2017 Q1 18$0

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2014 2015 2016 2017 Q1 18

Median post-IPO market cap US$m

Median deal size US$m

1.3% 1.3%

97.4%

Percentageof IPOs

62%

62%


Asia-Pacific

PerformanceEquity indices Q1 2018

Hang Seng+5.1%Hong Kong

Nikkei 225-4.3%Japan

ASX 200-2.1%Australia

Shanghai Composite-0.5%Mainland China

FTSE Straits Times+4.0%Singapore

KOSPI+0.8%South Korea

IPO pricing and performance Q1 2018


Share price performance since IPO

Main markets +24.4% +54.3%

Junior markets +32.6% +71.0%

Volatility index

Hang Seng Volatility20.37 index level

+39.5%YTD

+ or – indicates change since 29 December 2017+ or – indicates change compared with offer price at IPO

► Asia-Pacific equity markets bounced back in the face of global stock market turbulence in February 2018, largely fighting off fears of possible trade wars and the prospect of further hikes in US interest rates. These markets would likely remain resilient in the face of any future shocks this year.

► A rise in the number of Asia-Pacific IPOs is expected in the coming quarters of 2018, supported by strong economic growth in a number of countries, buoyant investor confidence, rising equity markets and a robust pipeline of companies ready to list.

► We expect another couple of active quarters for IPO activity on the HKEx and GEM. The Hang Seng Index is back at record levels, investor appetite for IPOs is solid and reforms to HKEx’s listing requirements (which are designed to attract more tech start-ups and family-owned businesses) are expected to become effective as early as June 2018.

► In contrast, IPO activity on Mainland China exchanges is unlikely to reach 2017 levels due to stricter supervision and a lower listing approval rate by the local regulator. However, the China Securities Regulatory Commission has indicated that it will provide more policy support to the listing of high-quality companies and industry giants. This may lead to companies that are currently listed overseas to consider returning to the A-share market.

► 2018 will see a continuing battle for Southeast Asian listings between Hong Kong, Singapore and local ASEAN exchanges.

► Activity in small-cap listings on the ASX is expected to stay strong, particularly for mining and metals and technology companies, as new players enter the sector and overseas interest develops.

► IPO activity on Japanese exchanges is expected to increase in the coming months, putting the country on course to reach approximately 100 IPOs this year. Some companies preparing to go public may likely accelerate their plans to list in an effort to get ahead of the expected mega-IPO of SoftBank’s Japanese telecoms business, which is forecast to list around Q3 2018 and could raise up to US$18b.

► Asia-Pacific will continue to be the world’s most active region in terms of deal numbers in the coming quarters. However, given the shift toward smaller deal sizes and with more mega-IPOs expected in other markets around the world, it is less certain that Asia-Pacific will hold onto the top spot in terms of capital raised for every quarter.

Outlook

+ indicates an increase in volatility as at 14 March 2018 compared with 29 December 2017 for year-to-date (YTD). Whereas - indicates a decrease in volatility over the same time period.


Asia-Pacific — Greater China market insight Greater China exchanges: a tale of two markets

“The story for Greater China stock markets in Q1 2018 was a tale of two opposite trends, with strong IPO issuance in Hong Kong while activity levels on the Mainland fell dramatically because of stricter supervision and lower approval rates. Looking forward, we expect robust IPO activity in Greater China with both markets taking steps to attract high-quality listings, especially of companies in the technology and biotech sectors.” Terence HoEY Greater China IPO Leader


Markets Q1 2018

Asia-Pacific — Greater China market insight

Highlights from the markets► Hong Kong’s Main Market (HKEx) and Growth Enterprise

Market (GEM) as a whole was the busiest exchange in the world in Q1 2018 by number of deals (57 IPOs) and ranked fourth by proceeds (US$3.1b). It accounted for 20% of IPOs worldwide and 7% of proceeds.

► Shenzhen Stock Exchange (SZSE), the busiest in the world in 2017, moved to fifth place in Q1 2018 by number of IPOs, while Shanghai (SSE) was seventh. By proceeds, SZSE ranked fifth, behind Shanghai (SSE) in third place.

► Q1 2018 saw the highest quarterly number of deals on the HKEx and GEM since Q4 2013 and the highest first quarter on record.

► HKEx benefited from the resilience of its stock market, the solid share price performance of companies post-IPO and its ability to process listings relatively quickly.

► IPO candidates found it much harder to gain regulatory approval in Mainland China in Q1 2018. This resulted in just 35 IPOs, down 74% on the Q1 2017 total of 134, which was the highest quarterly number of IPOs ever. At US$6.1b, proceeds were down 39% on Q1 2017.

► The decline in Mainland Chinese listings was not matched by the increase in Hong Kong. As a result, the number of IPOs and proceeds on Greater China exchanges (93 IPOs, US$9.3b) fell to its lowest level since Q2 2016.

► Despite the decline in Mainland exchanges’ IPO activity, they accounted for 3 of the global Top 20 IPOs and median deal size and median post-IPO market cap both rose significantly in Q1 2018 compared with 2017.

► Industrials remained the most active sector in Greater China by deal number, contributing 27% of deals. While consumer products led by proceeds in Q1 2018, accounting for 25% of the region’s proceeds.

Activity Q1 2018

Hong Kong Main Market


Technology7 IPOs | $204m

Industrials6 IPOs | $245m

Real estate3 IPOs | $1.1b


Bank of Gansu Co., Ltd.

$883mFinancials

Zhenro Properties Group Ltd.

$578mReal estate

A-Living Services Co., Ltd.

$524mReal estate

Shanghai and Shenzhen


Industrials10 IPOs | $1.1b

Consumer products5 IPOs | $981m

Technology5 IPOs | $509m


Huaxi Securities Co., Ltd.

$776mFinancials, Shenzhen

Hebei Yangyuan ZhiHuiBeverage Co., Ltd.

$669mConsumer staples, Shanghai

Jiangsu Financial Leasing Co., Ltd.

$636mConsumer products, Shanghai

Hong Kong Main Market Shanghai and ShenzhenQ1 2018 Change on

Q1 2017 Q1 2018 Change on Q1 2017

26IPOs

35IPOs

$2.8bproceeds

$6.1bproceeds

Shenzhen includes both listings on the Mainboard, Small and Medium Enterprise board and ChiNextAll amounts in table are in US$


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2014 2015 2016 2017 Q1 18

Change on Q1 2017

Change on Q1 2017

93IPOs

$9.3bproceeds

46%

24%

39%

74%

22%

80%



Trends

Sources of IPOs

Q1 2018

100%



Cross-border activity Q1 2018

Greater China issuers’ cross-border activityPercentage of all China issuers

Q1 2018

Leaving Greater China

Outbound3.3% of Greater China issuers* listed abroad

Coming to Greater China

Inbound 22.7% of cross-border IPOs globally** were listed on HKEx and GEM

*There were 91 IPOs by Greater China issuers in Q1 2018. This analysis is based on the listed company domicile, regardless of the listed company exchange.** There were 22 cross-border IPOs globally in Q1 2018.

5IPOs

3IPOs

To which destination? Q1 2018

3 IPOs to US exchanges

Transaction sizes

Hong Kong Main Market Shanghai and ShenzhenQ1 2018 Change on Q1 2017 Q1 2018 Change on Q1 2017


116%3%

100%

Percentage of IPOs


Despite a drop-off in Greater China IPO activity in Q1 2018, investor appetite remains strong. Every IPO in Hong Kong so far this year has been oversubscribed while every new Mainland listing has reached the maximum permitted first-day return of 44%.


9% 5% 0.58% 1%

1% 1% 0.29%

90% 94% 99.14% 99% 100.0%

2014 2015 2016 2017 Q1 18

10%

4%6% 5%

3%

2014 2015 2016 2017 Q1 18

$0

$100

$200

$300

$400

$500

2014 2015 2016 2017 Q1 18$0

$100

$200

$300

$400

$500

2014 2015 2016 2017 Q1 18



2% 68%


Outlook


PerformanceEquity indices Q1 2018 Mainland China

Shanghai Composite-0.5%

Shenzhen Composite-1.1%

Shenzhen SME+1.0%




Hong Kong Main Market

+2.1% +17.1%Shanghai and Shenzhen

+44.0% +71.1%

Equity indices Q1 2018 Hong Kong Volatility index

Hang Seng +5.1%

Hang Seng China Enterprises+8.3%

Hang Seng China Affiliated Corporations+1.7%

Hang Seng Volatility20.37 index level

+39.5 YTD

IPO pipelineMore than

407companies arein the China Securities Regulatory Commission (CSRC) pipeline.

More than

150companieshave submitted public filings with HKEx.

+ or – indicates change compared with offer price at IPO + or – indicates change since 29 December 2017

► The economic backdrop looks favorable for Hong Kong listings, with strong corporate earnings growth expected to support the stock market.

► The Hong Kong IPO market will continue to be busy, with more than 150 companies waiting to go public as at 20 March.

► A flurry of IPOs on the HKEx is expected when reforms to its listing regime are implemented — possibly as early as June. Through these reforms, the exchange aims to encourage IPO listings by technology and biotechnology companies, start-ups, as well as companies that want to preserve control within the founding family through a platform for companies with dual-class shares, where one group of shareholders has superior voting rights over the other.

► HKEx’s efforts to encourage companies already listed overseas to seek a second listing in Hong Kong are likely to bear fruit in the coming months.

► HKEx will continue to see an increasing number of cross-border IPOs from ASEAN companies. In Q1 2018, five cross-border IPOs on HKEx raised a combined US$115m. Three of these were from Singapore, with one each from Malaysia and the US. Reflecting the embrace of technology companies, three of these cross-border issuers were from the technology, media and telecoms sectors.

► In Mainland China, the number of flotations will remain subdued compared with 2017 levels because of the regulator’s stricter and more painstaking approach to approvals. In Q1 2018 (as at

20 March), the Issuance Examination Committee of China Securities Regulatory Commission processed only 63 IPO applications, with 29 applications being rejected. The rejection rate of IPOs increased to 46% in Q1 2018, compared with 36% in Q4 2017.

► HKEx may eventually face renewed competition from Mainland China exchanges, since the Mainland authorities are keen to attract a greater number of high-tech enterprises to list on the domestic stock market.

► Factors that could have a negative impact on the IPO market in Greater China include the possibility of trade barriers being introduced by the US and the expectation of further US interest rate rises, which would increase pressure on the outflow of capital.

- indicates a decrease in volatility as at 14 March 2018 compared with 29 December 2017 for year-to-date (YTD).


Asia-Pacific — Japan market insight Small-cap listings drive activity in Japan

“Despite an increase in market volatility during Q1 2018, Japanese investor sentiment continues to hold up. Appetite for small-cap listings is strong and we expect a steady flow of IPOs in the coming quarters, especially of high-tech companies — a sector encouraged by the Abenomics policies. If Japan continues its longest uninterrupted growth stint in almost three decades, we expect the total number of IPOs for 2018 could reach 100. Moreover, we expect that an increasing number of small or mid-cap companies listed on the MOTHERS and JASDAQ boards will grow and later transfer onto the Main Market.” Shinichiro SuzukiEY Japan IPO Leader


Markets Q1 2018

Tokyo Main Market JASDAQ and MOTHERSQ1 2018 Change on

Q1 2017 Q1 2018 Change on Q1 2017

6IPOs

12IPOs

$0.8bproceeds

$197.7mproceeds

$162.8mmedian deal size

$10.6mmedian deal size

Activity Q1 2018

Asia-Pacific — Japan market insight


Consumer products5 IPOs$316m

Real estate3 IPOs$411m

Technology3 IPOs$47m


CRE Logistics REIT$205mReal estateMain Market

XYMAX REIT Investment Corp.$201mReal estate Main Market

QB Net Holdings Co., Ltd. $196mConsumer productsMain Market

Equity index

Nikkei 225-4.3%Japan

Tokyo Main MarketIPO pricing and performance


+1.3%Share price performance since IPO

+3.2%

All amounts in table are in US$. + or – indicates change since 29 December 2017All amounts in table are in US$

Highlights from the market► The Japan Exchange Group, which includes the Tokyo Stock

Exchange, the two junior markets the MOTHERS board for growth companies and JASDAQ, was ranked as the sixth most active exchange by deal numbers globally in Q1 2018, with 18 IPOs — 6% of the global total. However, the number of IPOs in Japan was down by 38% in Q1 2018 on the same quarter last year and is the lowest for the first quarter since Q1 2014.

► Average IPO size was small in Q1 2018, with a dearth of large-cap deals. Total proceeds came to US$1.0b, the lowest quarter since Q2 2017 and the lowest first quarter since Q1 2015.

► The tendency for smaller companiesz to come to the IPO market continues. Q1 2018 saw 6 IPOs on the Tokyo Main Market, compared with 12 IPOs on the junior markets and 18 companies that transferred from the junior markets to be listed on the Main Market.

► We are seeing an increasing number of small or mid-sized companies grow while listed on the junior markets and transfer onto the Main Market as part of their growth strategy. Lately, an increasing number of start-ups regard an IPO as the means to grow their business rather than just an event to raise funds and become a public company.

► The range of companies that went public in Q1 2018 came from a diverse range of sectors with consumer products, real estate and technology being the three most active sectors by deal numbers. There were a number of IPOs from high-tech companies and specialist technology-related manufacturers.

► The high-tech flavor of listings reflects the strong support given to this sector by the Japanese Government, which is encouraging investment in artificial intelligence, fintech and other future-leading fields, as part of the Abenomics program to boost long-term economic growth.

► We expect an increase in IPO activity in Japan in the coming months. We expect approximately 100 IPOs for the full year of 2018, slightly higher than the 95 IPOs seen in 2017.


$0.0

$0.2

$0.4

$0.6

$0.8

$1.0

$1.2

0

10

20

30

40

50

60

70

80

2014 2015 2016 2017 Q1 18


$0

$4

$8

$12

$16

0

5

10

15

20

25

30

2014 2015 2016 2017 Q1 18

48% 45%

10%

Change on Q1 2017

Change on Q1 2017

18IPOs

$1.0bproceeds

38% 48%

14%

164%

43%


Europe, Middle East, India and AfricaMegadeals acting as icebreakers as we move into second quarter“EMEIA enjoyed a strong first quarter with a slew of European megadeals toward the second half of March pushing capital raised to the highest level for the first quarter since Q1 2015. We expect these deals will act as ice-breakers, preparing the way for a buoyant second quarter. With Indian markets performing well and the pipeline in the Middle East delivering a steady deal flow, prospects for the first half in EMEIA are positive.”Dr. Martin SteinbachEY Global and EMEIA IPO Leader


Europe, Middle East, India and Africa

Highlights from the markets► EMEIA saw 86 IPOs, which raised US$16.0b in Q1 2018,

making the region first by proceeds and second in terms of deal numbers.

► EMEIA markets saw a strong start to 2018. While the first quarter is traditionally the quietest, IPO deal numbers in Q1 2018 declined by 17% compared with Q1 2017, while proceeds rose by a substantial 191% on the back of megadeals. The area saw three of the global top ten IPOs and five of the top 20 IPOs in Q1 2018. There were two megadeals (43% of EMEIA proceeds) and six deals with proceeds above US$500m.

► EMEIA exchanges accounted for four of the top ten exchanges globally by proceeds in Q1 2018 and two by deal numbers.

► Deutsche Börse ranked second among global exchanges by capital raised, accounting for 20% of global proceeds. Oslo Bors, Euronext and London Stock Exchange came in eighth, ninth and tenth places respectively, accounting for 2.8%, 2.7% and 2.7% of global proceeds respectively.

► UK exchanges saw eight IPOs raising US$1.2b in Q1 2018, a decline of 38% by IPOs and 6% by proceeds over Q1 2017.

► On the back of a bumper 2017, India’s Bombay and National stock exchanges and their junior markets were ranked second and ninth by deal numbers among global top ten exchanges. Bombay’s Main and SME markets saw 23 IPOs, which raised US$739.7m in Q1 2018, while National’s Main and SME markets had 16 IPOs, which together raised US$45m.

► The Middle East saw six IPOs in Q1 2018, which raised a combined US$514m.

► Health care was the most active sector by proceeds in Q1 2018, accounting for 39% of EMEIA proceeds. This was followed by financials (18%) and real estate (10%).

► The proportion of financial sponsor-backed IPOs fell further both in terms of deal numbers and proceeds in Q1 2018.

Activity Q1 2018

Stock exchangesBy highest proceeds

Deutsche Börse(Main and Scale) $8.5b7 IPOsGermany

Oslo Bors$1.2b3 IPOsNorway

Euronext and Alternext$1.2b4 IPOsBelgium and Netherlands

IPOslargest byproceeds

Siemens Healthineers AG $5.2bGermanyHealth careDeutsche Börse

DWS Group GmbH & Co. KGaA$1.8bFinancialsGermanyDeutsche Börse

Elkem ASA$1.0bMaterialsNorwayOslo Bors

Sectorsby highestnumber of IPOs

Consumer staples15 IPOs$1.1b

Health care12 IPOs$6.3b



Markets Q1 2018


Q1 2017 Q1 2018 Change on Q1 2017

39IPOs

47IPOs

$15.3bproceeds

$0.7bproceeds


221%


$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

$7.0

0

50

100

150

200

250

300

350

2014 2015 2016 2017 Q1 18


$0

$20

$40

$60

$80

0

50

100

150

200

250

2014 2015 2016 2017 Q1 18

Change on Q1 2017

Change on Q1 2017

86IPOs

$16.0bproceeds

191%

0.4%

17%

3% 27%


Trends

Sources of IPOs

Q1 2018

Q1 2018

Cross-border 9.2% of all EMEIA issuers* listed abroad

Outbound3.4% of all EMEIA issuers* listed outside EMEIA

Inbound9.1% of cross-border IPOs globally** listedon EMEIA exchanges but came fromoutside the region

*There were 87 IPOs by EMEIA issuers in Q1 2018. This analysis is based on the listed company domicile, regardless of the listed company exchange.** There were 22 cross-border IPOs globally in Q1 2018.



EMEIA issuers’ cross-border activityPercentage of all EMEIA issuers

While exchanges across Europe continue to see a healthy flow of new listings, India and the Middle East exchanges are reaching the point in their evolution where they will see an acceleration in the number of private and state-owned companies looking to raise capital from the public markets.

2IPOs

3IPOs

Transaction sizes Q1 2018

Main markets Junior marketsQ1 2018 Change on Q1 2017 Q1 2018 Change on Q1 2017


6%3%

91%



7%3%

90%

Percentageof IPOs

8IPOs


150%

21% 19% 15% 10% 7%

1% 1%2% 2%

3%

78% 80% 83% 89% 90%

2014 2015 2016 2017 Q1 18

16%

12%8% 8% 9%

2014 2015 2016 2017 Q1 18

$0

$100

$200

$300

$400

$500

2014 2015 2016 2017 Q1 18$0

$10

$20

$30

$40

2014 2015 2016 2017 Q1 18



5%141%

9%




BSE SENSEX-0.6%India

CAC 40-1.5%France

DAX 30-5.3%Germany

Euro STOXX 50-1.9%Europe

FTSE 100-7.2%UK

JSE All Share-1.8%South Africa

MICEX+7.8%Russian Federation

Tadawul All Share-6.1%Saudi Arabia




Main markets +3.2% +0.9%

Junior markets +1.4% +2.2%

Volatility indices

VSTOXX®

16.91index level

+25.2%YTD

VDAX®

18.40 index level

+30.0%YTD

VFTSE 100 13.97 index level

+46.3%YTD

+ or – indicates change since 29 December 2017

- + indicates a increase in volatility as at 13 March 2018 compared with 29 December 2017 for year-to-date (YTD). Whereas - indicates an decrease in volatility over the same time period.+ or – indicates change compared with offer price at IPO

► The outlook for the rest of 2018 looks positive for EMEIA as economic growth remains robust; and consumption and investments gain healthy momentum across the region. The increase in IPO activity and growth in the IPO pipeline is being driven by most countries and sectors; with businesses continuing to profit from the low interest rates and positive global environment.

► The Europe IPO outlook remains positive on the back of robust growth in the German and French economies. With two megadeals in Q1 2018, IPO activity on Deutsche Börse for 2018 is expected to have one of the strongest years. We expect a number of megadeals to come to the European public markets later this year, includingon the German, Swiss and Nordics capital markets. These include IPOs of carve-outs from conglomerates and IPOs by family businesses. These deals could be “ice-breakers” that encourage other private companies to join the IPO pipeline.

► The IPO outlook for the UK in 2018 remains neutral as the UK's post-Brexit relationship with the EU remains uncertain. Despite a slight uptick in the GDP forecast and manufacturing growth, the underlying pace remains slow. However, the IPO pipeline seems strong with cross-border IPOs from big African corporations.

► The Indian IPO market is expected to remain robust in 2018 due to the resilient nature of the economy and strong domestic liquidity. The IPO pipeline is healthy with dozens of companies looking to go public later this year. The divestment of state-owned enterprises by the Government is also likely to propel IPO activity in the country. More than 100 small and medium enterprises (SMEs) are expected to list on the SME platform this year.

► With an improving macroeconomic and political environment, the Middle East should witness a surge in IPO activity. There is a strong pipeline of IPOs with government-owned assets being prepared for IPO in Kuwait, Egypt, KSA and the UAE. In addition, family-owned, owner-managed and private equity-backed businesses are also signalling their intention to come to the public markets during 2018.

► Due to political and economic instability in many key markets in Africa, IPO activity is likely to remain subdued for the rest of 2018.

Outlook


Markets Q1 2018 Activity Q1 2018

Performance Q1 2018

Europe snapshot


Q1 2017 Q1 2018 Change on Q1 2017

24IPOs

15IPOs

$14.1bproceeds

$0.7bproceeds


281%


33%

Change on Q1 2017

Change on Q1 2017

39IPOs

$14.7bproceeds

15% of IPOs are financial sponsor-backed

6% of proceeds are financial sponsor-backed

247%

20% IPO pricing and performance


Main markets +1.7%Junior markets +2.0%Share price performance since IPO

Main markets +1.2%Junior markets +3.4%

Equity indices

CAC 40-1.5%France

DAX 30-5.3%Germany

Euro STOXX 50-1.9%Europe

FTSE 100-7.2%UK

Volatility index

VSTOXX®

+25.2% | 16.9 index levelYTD

VFTSE 100 +46.3% | 14.0 index levelYTD




Consumer products5 IPOs | $0.7b

All amounts in table are in US$ + or – indicates change since 29 December 2017

+ indicates a increase in volatility as at 14 March 2018 compared with 29 December 2017 for year-to-date (YTD).



Siemens Healthineers AG $5.2b Health care, Deutsche Börse

DWS Group GmbH & Co. KGaA$1.8b Financials, Deutsche Börse

Elkem ASA$1.0b Materials, Oslo Bors

Stock exchanges by highest total proceeds

Deutsche Börse (Main and Scale) $8.5b | 7 IPOs Germany

Oslo BorsUS$1.2b | 3 IPOs Norway

Euronext and AlternextUS$1.2b | 4 IPOs Belgium, Netherlands

Trends Q1 2018

Transaction sizesMain markets Change on Q1 2017 Junior markets Change on Q1 2017

Median post-IPO market cap $429.7m $31.4m

Median deal size $328.2m $7.0m155%

$0

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$2

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$4

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$6

0

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40

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100

120

140

160

2014 2015 2016 2017 Q1 18


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$70

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20

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100

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140

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180

2014 2015 2016 2017 Q1 18

Cross-border IPOs: top IPO issuers

Cross-border 18% of all Europe issuers* listed abroad

7IPOs

Outbound5.1% of all Europe issuers* listed outside Europe

2IPOs

Inbound9.1% of cross-border IPOs globally** listed on European exchanges but came from outside Europe

2IPOs

*There were 39 IPOs by European issuers in Q1 2018. This analysis is based on the listed company domicile, regardless of the listed company exchange.

** There were 22 cross-border IPOs globally in Q1 2018.

114%

30%

40%

5%

9%

85%

40%


EMEIA — UK IPO market insightEconomic and political uncertainty subdue UK IPOs

“The first quarter of 2018 has seen low volumes of listings due to a combination of global volatility, currency movement and Brexit uncertainty — all factors that are likely to continue to subdue investor sentiment and in turn, IPO activity in the coming quarters. Financial services should remain active, given the strength of investor interest, but a lack of ‘exciting’ brand names or strong PE-backed listings in the pipeline continue to act as a brake on activity.”Scott McCubbinEY UK and Ireland IPO Leader


EMEIA — UK IPO market insight

Highlights from the markets► London Stock Exchange (LSE) saw a quiet start to 2018, with

eight IPOs raising US$1.2b in aggregate. ► LSE was ranked 10th among the top 10 global exchanges by

proceeds, accounting for 2.7% of global proceeds. LSE accounted for 2.8% of global IPOs; down from 3.3% in Q1 2017.

► London Main Market saw three IPOs, which raised a combined US$1.1b, while the Alternative Investment Market (AIM) had five IPOs, which raised US$66m in total. London’s Main Market and AIM combined saw a decline of 38% by deal numbers, while proceeds rose marginally by 6%.

► Newly listed stock in the Main Market delivered returns of 31% on average above list price as at mid-March, although two of the five stocks listed below their expected price.

► The financial services sector has dominated Q1 2018, accounting for two of the eight IPOs and 51% of UK IPO proceeds. This focus confirms that London continues to hold its position as a global financial centre despite political turbulence.

► The FTSE reached record levels during January 2018, largely because the low value of the pound made UK investments of particular interest to international investors. However, global market volatility affected the UK, along with all the other major global exchanges in February. The UK equity market has since rebounded strongly, but remains some way off its record levels.

► In common with other parts of the world, the volatility in global share indices in February has delayed some of this quarter’s potential listings until markets have fully stabilized.

► Only one of the eight IPOs in Q1 2018 was PE-backed. The lull in PE-backed IPOs has also held back the total proceeds raised on UK exchanges.

Activity Q1 2018


Financials 2 IPOs$587m

Technology2 IPOs$51m

Energy1 IPO$500m

IPOs on AIMlargest by proceeds

OnTheMarket plc$43mTechnologyUK

VR Education Holdings plc $8mTechnologyIrelandDual listing on Irish Stock Exchange

Cradle Arc plc$8mMaterialsUK

IPOs on Main Marketlargest by proceeds

Energean Oil & Gas SA $500mEnergyGreece

JTC plc$338mFinancialsJersey

IntegraFin Holdings Ltd$249mFinancialsUK


Markets Q1 2018

London Main Market London AIMQ1 2018 Change on

Q1 2017 Q1 2018 Change on Q1 2017

3IPOs

5IPOs

$1.1bproceeds

$66mproceeds



$0

$2

$4

$6

$8

0

10

20

30

40

50

60

70

80

2014 2015 2016 2017 Q1 18


$0

$5

$10

$15

$20

$25

0

5

10

15

20

25

30

35

40

45

2014 2015 2016 2017 Q1 18

Change on Q1 2017

Change on Q1 2017

8IPOs

$1.2bproceeds

6%

13%

0%

38%

63%

47%


Trends

Sources of IPOs

Q1 2018

29%

0%71%


12%

0%

88%

Percentage of IPOs


Leaving UK

Outbound33% of UK issuers* listed abroad

Coming to UK

Inbound 18% of cross-border IPOs globally**were listed on UK exchanges

*There were 6 IPOs by UK issuers in Q1 2018. This analysis is based on the listed company domicile, regardless of the listed company exchange.** There were 22 cross-border IPOs globally in Q1 2018.


Main marketTop countries of origin► Greece (1 IPO | $500m)► Jersey (1 IPO | $338m)

AIMTop countries of origin► Ireland (1 IPO | $8m)► US (1 IPO | $-*)

4IPOs

2IPOs

Transaction sizes

London Main Market London AIMQ1 2018 Change on Q1 2017 Q1 2018 Change on Q1 2017





277%

134%


IPOs from the financials sector led the field for UK listings during a quiet quarter. Although the market may remain low-key overall, we expect to see some of the previously postponed listings to be reactivated in Q2 2018, especially those with smaller deal size. We also expect an influx of cross-border IPOs from many parts of the world.

$0

$200

$400

$600

$800

$1,000

2014 2015 2016 2017 Q1 18$0

$20

$40

$60

$80

$100

$120

2014 2015 2016 2017 Q1 18

59%

65%

30% 35%24%

12% 12%

0%0%

0%1% 0%

70% 65% 76% 87% 88%

2014 2015 2016 2017 Q1 18

*This IPO would be priced on 26 March, when proceeds information becomesavailable.




FTSE 100-7.2%UK

FTSE 350-6.7%UK

FTSE AIM All-Share+0.4%UK




London Main Market +23.9% +30.8%

London AIM +1.1% +1.5%

Volatility indices

FTSE 100 VIX (VFTSE 100)13.97 index level

+46.3%YTD

+ or – indicates change since 29 December 2017+ or – indicates change compared with offer price at IPO+ indicates a increase in volatility as at 14 March 2018 compared with 29 December 20167for year-to-date (YTD) .

► Investors and IPO candidates are concerned about the possibility of continued volatility on global markets and the potential impact on markets of policy shifts in the US. This combined with Brexit uncertainty may hold back IPO activity in Q2 2018 and for the rest of 2018.

► The UK IPO pipeline is currently still looking strong for small Main Market listings and AIM listings. We expect to see IPO activity to peak in Q3 2018 for this group of companies, particularly as some of the delayed listings from Q1 2018 come on stream. There are some signs of more listings from larger companies anticipating more significant deal sizes, but this part of the market is very much waiting for a first-mover to lead the way.

► The low valuation of the pound, along with the continued uncertainty around the UK’s exit from the EU will hold back appetite for listing toward the end of the year. As a result, we expect to see a quiet conclusion to 2018 as Brexit approaches.

► Overall, investor confidence remains low, particularly as other opportunities for investment currently stand out above the IPO market in terms of returns. This explains the low level of financial sponsor-backed IPO activity in recent months.

► IPO pricing remains under pressure in 2018 due to the continuing low level of attractive private equity-backed or VC-backed listings. This lull may persist until we see some strong brand names or financial sponsor-backed companies with genuinely compelling equity stories come to the public markets, acting as ice-breakers.

► Financial Conduct Authority (FCA) changes to the rules around UK IPOs will come into effect in July 2018, clarifying and enhancing the listing process, particularly for foreign companies seeking to list in the UK. As a result of these rule changes, we expect uplift in UK IPO activity level in the second half of 2018 and beyond. The most significant FCA change relates to the timing of the IPO documentation, which would be become effective from 1 July 2018.

Outlook

AppendixAreas and regional IPO markets facts and figures

Definitions

Global IPO trends: Q1 2018 | *Data based on domicile of the exchange, regardless of the listed company domicile. Euronext includes Amsterdam, Paris, Brussels and Lisbon; Shenzhen (SZSE) includes the Main Board, SME Board and ChiNext.

Appendix

By number of IPOs

2018

yea

r-to

-dat

e

Ranking Stock exchanges* Number of IPOs % of global IPOs

1 Hong Kong (HKEx) and GEM 57 19.9 2 Bombay (BSE) and SME 23 8.0 3 NASDAQ 20 7.0 4 Australia (ASX) 19 6.6 5 Shenzhen (SZSE and Chinext) 18 6.3 6 Tokyo (TSE), MOTHERS and JASDAQ 18 6.3 7 Shanghai (SSE) 17 5.9 8 New York (NYSE) 16 5.6 9 National (NSE) and SME 16 5.6

10 Korea (KRX) and KOSDAQ 9 3.1 11 NASDAQ OMX (Copenhagen, Helsinki, Iceland, Sweden) and First North 9 3.1 12 London Market and AIM 8 2.8

Other stock exchanges (25 exchanges) 57 19.9

Global IPO activity 287 100.0

2017

Ranking Stock exchanges* Number of IPOs % of global IPOs

1 Shenzhen (SZSE and Chinext) 222 13.0 2 Shanghai (SSE) 214 12.5 3 Hong Kong (HKEx) and GEM 157 9.2 4 NASDAQ 108 6.3 5 Australia (ASX) 96 5.6 6 Bombay (BSE) and SME 91 5.3 7 Tokyo (TSE), MOTHERS and JASDAQ 90 5.3 8 NASDAQ OMX (Copenhagen, Helsinki, Iceland, Sweden) and First North 86 5.0 9 National (NSE) and SME 80 4.7

10 London Main Market and AIM 78 4.6 11 New York (NYSE) 71 4.1 12 Korea (KRX) and KOSDAQ 56 3.3

Other stock exchanges (52 exchanges) 362 21.2

Global IPO activity 1,711 100.0

By proceedsRanking Stock exchanges* US$b % of global IPOs

1 New York (NYSE) 10.2 23.9 2 Deutsche Börse (Main) and Scale 8.5 19.93 Shanghai (SSE) 3.3 7.74 Hong Kong (HKEx) and GEM 3.1 7.2 5 Shenzhen (SZSE and Chinext) 2.8 6.6 6 NASDAQ 2.5 5.97 Mexican (BMV) 2.2 5.2 8 Oslo Bors 1.2 2.8 9 Euronext and Alternext (Belgium, France, Netherlands, Portugal) 1.2 2.7

10 London Main Market and AIM 1.2 2.7 11 Tokyo (TSE), MOTHERS and JASDAQ 1.0 2.4 12 Bolsa de Madrid 0.8 1.9

Other stock exchanges (25 exchanges) 4.8 11.1

Global IPO activity 42.8 100.0

Ranking Stock exchanges* US$b % of global IPOs

1 New York (NYSE) 30.1 15.7 2 Shanghai (SSE) 20.3 10.5 3 Hong Kong (HKEx) and GEM 16.1 8.4 4 London Main Market and AIM 14.8 7.7 5 Shenzhen (SZSE and Chinext) 13.7 7.1 6 Bombay (BSE) and SME 11.3 5.9 7 NASDAQ 10.3 5.4 8 Korea (KRX) and KOSDAQ 6.8 3.5 9 Tokyo (TSE), MOTHERS and JASDAQ 6.1 3.2

10 Sao Paulo (B3) 5.7 3.0 11 NASDAQ OMX (Copenhagen, Helsinki, Iceland, Sweden) and First North 4.9 2.6 12 SIX Swiss Exchange 4.6 2.4

Other stock exchanges (52 exchanges) 47.7 24.8

Global IPO activity 192.3 100.0

Top 12 stock exchanges


Appendix

Regional IPO facts and figures: Americas

US 36 44% -39% 12.8 17% 2%

Canada1 4 0% -64% 0.1 4% -79%

Brazil2 1 -50% -67% 0.3 -0.4% -88%

Mexico 2 100% 100% 2.2 146% 157%

Jamaica 1 NA NA — 22% NA

Chile3 — -100% NA — -100% NA

Argentina4 — NA NA — NA NA

Americas 44 29% -41% 15.4 22% -5%

Regions/country*Change previous quarter%

(vs. Q4 17)Proceeds US$b

current quarter: Q1 2018Change QOQ%

(vs. Q1 17)

Change previous quarter%

(vs. Q4 17)

Change QOQ% (vs. Q1 17)

IPOs current quarter: Q1 2018

Quarterly comparison

1. In Q1 2018, there were 3 IPOs raising a combined US$142m on Toronto Stock Exchange and TSX Venture Exchange. There was also 1 IPO on Canadian Securities Exchange that raised US$0.4m — these listings were excluded on page 8.2. In Q1 2018, there was 1 IPO on Brazil’s B3 which raised US$269m. There was also one IPO by Brazilian company which conducted cross-border deal on the New York Stock Exchange, which raised US$269m. 3. In Q1 2017, there was 1 IPO on Chile’s Santiago Stock Exchange which raised US$198m. In Q1 2018, there were no IPOs on this exchange. 4. In Q1 2018 and Q1 2017, there were no IPOs on Argentina’s Buneos Aires Stock Exchange. There were 2 IPOs by Argentinean companies which conducted cross-border deal on the New York Stock Exchange, they raised a combined US$865m.


Appendix

1. In 2017 and Q1 2018, there was no IPOs on New Zealand Exchange.

Regional IPO facts and figures: Asia-Pacific

Indonesia 3 200% -80% 0.05 109% -88%

Thailand 6 20% -74% 0.37 455% -78%

Singapore 1 -67% -83% 0.01 -89% -1%

Malaysia 6 50% 200% 0.04 -1% 1%

Myanmar 1 NA NA — NA NA

Philippines — -100% NA — -100% NA

Sri Lanka — -100% -100% — -100% -100%

Cambodia — NA NA — NA NA

Vietnam 1 NA — 0.18 NA -74%

ASEAN 18 20% -63% 0.66 -42% -85%

Mainland China 35 -74% -59% 6.14 -39% -25%

Hong Kong 57 46% 12% 3.09 78% -36%

Taiwan 1 NA — 0.02 NA 20%

Greater China 93 -46% -33% 9.26 -22% -29%

Japan 18 -38% -51% 1.02 -48% -62%

South Korea 9 -25% -40% 0.37 15% -66%

Australia 19 -30% -41% 0.11 -33% -90%

New Zealand1 — NA NA — NA NA

Oceania 19 -30% -41% 0.11 -33% -90%

Asia-Pacific 157 -39% -42% 11.42 -26% -49%

Regions/country*IPOs current

quarter: Q1 18Change QOQ%

(vs. Q1 17)Change previous quarter%

(vs. Q4 17)Proceeds US$b

current quarter: Q1 18Change QOQ% (vs. Q1 17)

Change previous quarter% (vs. Q4 17)



Appendix

Regional IPO facts and figures: EMEIA

Nordics (Denmark, Norway, Sweden and Finland)

12 -25% -64% 1.9 274% -8%

Commonwealth of Independent States (CIS)1 — -100% -100% — -100% -100%

Central and Southern Europe (CSE)

4 300% -67% 0.7 51% 481%

Germany, Switzerland and Austria (GSA)

9 350% 29% 8.9 2978% 172%

Mediterrean (Italy and Spain) 2 -67% -80% 0.8 -55% -24%

WEM (Western Europe and Maghreb)

4 0% -20% 1.2 443% 54%

Continental Europe 31 3% -55% 13.6 328% 81%

UK 8 -38% -68% 1.2 6% -76%

Europe 39 -9% -59% 14.7 246% 20%

Africa 1 -75% -50% 0.0 -99% -100%

India 40 -2% -5% 0.8 13% -86%

Middle East and North Africa 6 -1% -45% 0.5 0.2% -81%

EMEIA Area 86 -17% -42% 16.0 191% -24%


Regions/country*Proceeds US$b

current quarter: Q1 18Change QOQ% (vs. Q1 17)


IPOs current quarter: Q1 18

Change QOQ% (vs. Q1 17)


1. In Q1 2018, there was no IPO on Moscow’s MICEX whereas in Q1 2017, there were 1 IPO on Moscow’s MICEX which raised US$324m.


Appendix

Most active sectors around the world

Summary of the top three sectors by number of IPOs, by region1 and sub-region1 for Q1 2018 ()

Stock exchange regions Industrials Technology Consumer

products Materials Health care Consumer staples Energy Real estate Media and

entertainment Financials Retail Telecommunications

Americas

• US

Asia-Pacific

• Greater China

• Japan

EMEIA

• Europe2

• UK3

Global

Q1 2018 IPO activity 45 38 35 32 30 27 18 18 16 14 10 4

1. Region and sub-regions are classified according to the domicile of the exchange, regardless of the listed company domicile. Please refer to the appendix for the geographic definitions of the regions and sub-regions, which differs slightly from EY’s regional classification.2. For Q1 2018, US exchanges saw four leading sectors. Health care led the pack with 9 IPOs, followed by energy with 6 IPOs. The technology and consumer products sectors accounted for 4 IPOs each, they had proceeds of US$3.2b and US$1.7b respectively.3. For Q1 2018, Asia-Pacific exchanges saw four leading sectors. Industrials ranked first with 31IPOs, followed by technology with 23 IPOs. The consumer products and materials sectors accounted for 21 IPOs each, with proceeds of US$2.6b and US$656m respectively.


Definitions

Methodology• The data presented in the Global IPO trends: Q1 2018 report and press release

is from Dealogic and EY. Q1 2018 (i.e., January-March) and YTD 2018 (January—March) is based on priced IPOs as of 14 March 2017 and expected IPOs in March. Data is up to 14 March 2018, 6 a.m. UK time. All data contained in this document is sourced to Dealogic and EY unless otherwise noted.

• For the purposes of these reports and press releases, we focus only on IPOs of operating companies and define an IPO as a company's first offering of equity to the public.

• This report includes only those IPOs for which Dealogic and EY offer data regarding the issue date (the day the offer is priced and allocations are subsequently made), trading date (the date on which the security first trades) and proceeds (funds raised, including any over-allotment sold). Postponed IPOs, or those which have not yet been priced, are therefore excluded. Over-the-counter (OTC) listings are also excluded.

• In an attempt to exclude non-operating company IPOs such as trusts, funds and special purpose acquisition companies (SPACs), companies with the following Standard Industrial Classification (SIC) codes are excluded:• 6091: Financial companies that conduct trust, fiduciary and

custody activities• 6371: Asset management companies such as health and welfare funds,

pension funds and their third-party administration as well as other financial vehicles

• 6722: Companies that are open-end investment funds• 6726: Companies that are other financial vehicles• 6732: Companies that are grant-making foundations• 6733: Asset management companies that deal with trusts, estates and

agency accounts• 6799: Special purpose acquisition companies (SPACs)

• In our analysis, unless stated otherwise, IPOs are attributed to the domicile of the company undertaking an IPO. The primary exchange on which they are listed is as defined by Dealogic and EY research.

• A cross-border (or foreign) listing is where the stock exchange nation of the company is different from the company's domicile (i.e., issuer's nation).

• For IPO listings on HKEx; SSE; SZE; Japan’s Tokyo Stock Exchange (TSE); TSE MOTHERS; Korea's KRX and KOSDAQ; Thailand's SET and MAI; Indonesia IDX; WSE; NewConnect; TSX and TSX-V exchanges, we use their first trading date in place of issue date.

Markets definitions• Many stock exchanges have set up main markets and junior markets:

• Main markets are where medium and large IPOs (by proceeds) are usually listed and traded. Junior markets are where small-cap companies or smaller IPOs are listed or traded. Stock exchanges without junior markets are classified as main markets.

• Junior markets include Americas: Toronto Venture Exchange and Canadian National Stock Exchange; Asia-Pacific: Malaysia ACE Market, Bombay SME, Hong Kong Growth Enterprise Market, Japan JASDAQ, Japan MOTHERS, Korea KOSDAQ, Thailand’s Market for Alternative Investment, National SME, Shenzhen ChiNext, Singapore Catalist, Tokyo Stock Exchange MOTHERS Index; EMEIA: Alternext, London Alternative Investment Market, Germany's Frankfurt SCALE (formerly Entry Standard), Spain's Mercado Alternativo Bursatil, NASDAQ OMX First North, Warsaw New Connect, Johannesburg Alternative Market, Nomu — Parallel Market.

• Emerging markets or rapid-growth markets include issuers from Argentina, Armenia, Bangladesh, Bolivia, Brazil, Bulgaria, Chile, Colombia, Croatia, Cyprus, Egypt, Ethiopia, Greater China, Hungary, India, Indonesia, Ireland, Israel, Kenya, Kuwait, Kazakhstan, Laos, Lithuania, Malaysia, Mauritius, Mexico, Namibia, Pakistan, Peru, Philippines, Poland, Qatar, Russian Federation, Saudi Arabia, Sierra Leone, Singapore, Slovenia, South Africa, South Korea, Sri Lanka, Tanzania, Thailand, Tunisia, Turkey, Ukraine, United Arab Emirates, Vietnam and Zambia.

• Developed markets include issuers from Australia, Austria, Belgium, Bermuda, Canada, Denmark, Finland, France, Germany, Greece, Guernsey, Isle of Man, Italy, Japan, Jersey, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, the United Kingdom and the United States.

Geographic definitions• Africa includes Algeria, Botswana, Egypt, Ghana, Kenya, Madagascar, Malawi,

Morocco, Namibia, Rwanda, South Africa, Tanzania, Tunisia, Uganda, Zambia and Zimbabwe.

• Americas includes North America and Argentina, Bermuda, Brazil, Chile, Colombia, Jamaica, Mexico and Peru.

• Asia includes Bangladesh, Greater China, Indonesia, Japan, Laos, Malaysia, Philippines, Singapore, South Korea, Sri Lanka, Thailand and Vietnam.

• Asia-Pacific includes Asia (as stated above) plus Australia, New Zealand, Fiji and Papua New Guinea.

• Central and South America includes Argentina, Bermuda, Brazil, Chile, Colombia, Ecuador, Jamaica, Mexico, Peru and Puerto Rico.

• EMEIA includes Armenia, Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, India, Ireland, Isle of Man, Italy, Kazakhstan, Luxembourg, Lithuania, Netherlands, Norway, Pakistan, Poland, Portugal, Russian Federation, Spain, Sweden, Switzerland, Turkey, Ukraine and United Kingdom plus the Middle East and Africa countries listed below.

• Greater China includes Mainland China, Hong Kong, Macau and Taiwan.• Middle East includes Bahrain, Iran, Israel, Jordan, Kuwait, Oman, Qatar,

Saudi Arabia, Syria, United Arab Emirates and Yemen.• North America consists of the United States and Canada.

Glossary• Financial sponsor-backed IPOs refer to IPOs that have private equity,

venture capital investors or both.• First-day average returns is the market value-weighted median of issuers’ offer

price versus the closing price at their first trade date, with the exception of the US section (page 10), where this is the mean of issuers’ offer price versus the closing price at their first trade date.

• Median deal size refers to the median IPO proceeds.• Post-IPO market cap is the market value of the company after its IPO is

completed. Median post-IPO market cap is calculated for IPOs priced by 14 March.

• Proceeds refers to total fund raised by the issuer company and selling shareholders. This is the total deal size.

• QOQ refers to quarter-on-quarter. This refers to the comparison of IPO activity on Q1 2018 with Q1 2017 for this current report.

• Share price performance since IPO is the market value weighted median current returns, which is the year-to-date returns as at 13 March 2017 versus offer price. This should be compared with equity indices performance that is also measured YTD. For the US section (page 10), this is the mean current returns.

• State-owned enterprise (SOE) privatizations refers to former state-owned entities that have completed their IPO listings to become public companies.

• YOY refers to year-on-year. This refers to the comparison of IPO activity for the first three months of 2018 with the first three months of 2017 for this current report.

• YTD stands for year-to-date. This refers to priced IPOs from 1 January to 14 March 2018 plus expected IPOs by the end of March.

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EYG no: 01791-183GBL

ED NoneThis material has been prepared for general information purposes only and is not intended to be relied upon as accounting, tax or other professional advice. Please refer to your advisors for specific advice.

ContactsDr. Martin SteinbachEY Global and EMEIA IPO [email protected]

Jackie KelleyEY Americas IPO Markets [email protected]

Ringo ChoiEY Asia-Pacific IPO [email protected]

Terence HoEY Greater China IPO [email protected]

Shinichiro SuzukiEY Japan IPO [email protected]

Scott McCubbinEY UK and Ireland IPO [email protected]

Find out more about future IPO prospectsFor more information on global IPO performance by quarter and year, and how the IPO market looks set to develop for the next 12 months, visit the EY Global IPO website:ey.com/ipo

mailto:[email protected]






http://www.ey.com/ipocenter

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