The deal is unlikely to open the floodgates, bankers and analysts say
Porsche’s landmark listing is defying market turmoil giving a welcome boost to a battered pipeline of share sales but the deal is unlikely to open the floodgates, bankers and analysts say, with European listings facing their worst year since 2009.
European companies have so far raised $44 billion, of which only $4.5 billion comes from IPOs, the lowest amount since the global financial crisis in 2009, according to Refinitiv data. Dealmakers are in the process of wrapping up orders for the long-awaited Porsche float, a deal that could see Volkswagen raising up to 9.4 billion euros.
“The positive response to the listing of Porsche is clearly helpful to the overall sentiment, but is not necessarily transformative in terms of activity levels in the near-term,” said Martin Thorneycroft, head of EMEA cash equity capital markets at Morgan Stanley.The STOXX 600 pan-European index of shares is down around 20% year-to-date, while key volatility trackers remain elevated above levels usually seen as adequate to launch an IPO.
Some European companies such as EQT-backed skincare firm Galderma and Spain’s Mecalux have done most of the pre-work to launch their listing but they are waiting for a better environment to come to market. Going forward, as interest rates continue to rise and companies look for financially efficient ways of refinancing their balance sheets, equity capital markets are likely to see a surge in convertible bond activity.
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