Why Investors Are Ditching Unicorns for Emerging Market IPOs

<p>The first
three quarters of 2023 have shown a notable shift in the global initial public
offering (IPO) market. With a decline of 5% in IPO volumes and a decrease of 32% in
proceeds year-over-year (YoY), investor appetite is changing. According to the
newest EY Global IPO Trends report, factors such as tightening
liquidity, evolving interest in emerging markets, and declining unicorn IPOs
are reshaping the landscape. </p><p>Finance
Magnates discussed
the report's findings with the Global EY IPO Leader, George Chan. According to Chan,
the decline in the number and value of IPOs was caused by regulatory factors, a
decrease in investor confidence, and a decline in materials companies.</p><p>IPO Market Records a
Decline in Q3, EY Report Finds</p><p>The global
IPO scene <a href="https://www.ey.com/en_gl/ipo/trends" target="_blank" rel="nofollow">witnessed </a>968 IPOs with a capital of $101.2 billion, marking a drop of 5% and
32% YoY. In the Asia-Pacific region, Mainland China's IPO market has
slowed due to regulatory measures, while Hong Kong has seen less activity owing
to higher interest rates and dwindling investor confidence. </p><p>Australia's
IPO issuance has plummeted, especially in the materials sector. Although
the US experienced a slight uptick in IPO numbers, Canada saw its IPO volume
more than halve, mainly because of a drop in materials companies.</p><p><a href="https://www.financemagnates.com/fintech/how-has-the-ipo-market-performed-this-year/" target="_blank" rel="follow">The decline
in IPO proceeds is even more significant</a>. The number of mega-deals has halved
compared to last year, contributing to weaker post-IPO share price performance.
Landmark IPOs from last year in sectors like energy and luxury cars have not
been matched this year. The top IPOs for 2023 are only about half the size of
2022's largest offerings.</p><blockquote><p lang="en" dir="ltr">Challenging market conditions continue to dampen listing activity on the London IPO market in Q3 2023: