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Major shift in global IPO market share from the past five years - Industry roundup: 5 April

Major shift in global IPO market share from the past five years

The year in IPOs has kicked off on a cautiously optimistic note, marked by a selective thaw following a quieter period, according to the EY Global IPO Trends Q1 2024 report. The Americas and EMEIA IPO markets had a bright start in 2024, increasing global proceeds. However, the Asia-Pacific region started weakly, weighing down the overall global volume. For Q1 2024, the global IPO market saw 287 deals raise US$23.7bn, a 7% decrease but a 7% increase year-over-year (YOY), respectively. 

In Q1 2024, most key IPO markets witnessed many newly issued IPOs whose current share prices surpassed their offer prices. This trend could indicate improved valuations and pricing levels, reflecting growing confidence among issuers and investors.

An IPO is one of the pinnacle achievements for private equity (PE) firms, serving as a public showcase of their acumen and a defining milestone in their growth journey. In Q1 2024, approximately 10 PE-backed IPOs came to the market, five of which were featured among the top 10 global IPOs, a testament to their significant market presence.

The promise and reach of the artificial intelligence (AI) vertical are currently experiencing significant growth within the private realm. The majority of AI and AI-associated businesses are still in the seed or early stage of venture capital (VC) rounds. This suggests there could be a surge in IPOs in future years as these companies mature in the private domain before making a public debut.

The global IPO market has experienced significant shifts in geographical composition, driven by ongoing macroeconomic and geopolitical dynamics. The Americas continued to exhibit strong performance in IPO activity compared with both the previous quarter and Q1 2023, with 52 deals and US$8.4b in proceeds, up 21% and up a whopping 178%, respectively, YOY. Each of the top seven deals in Q1 2024 raised over US$500m versus just one in Q1 2023. The US, after experiencing a 20-year low in proceeds in 2022, has finally witnessed a noticeable recovery in the first quarter of the year, riding on the wave of the market rally from last year.

Driven by a subdued IPO market sentiment across the region, Asia-Pacific IPO activity in Q1 recorded 119 deals and US$5.8bn in proceeds, down 34% and 56% YOY, respectively. This decline was especially sharp in mainland China and Hong Kong, with the number of deals decreasing more than half and deal size falling by nearly two-thirds. Both markets have experienced a consistent decline in IPO activity over the past few years. There have been only 10 IPOs so far this year in Hong Kong, with two exceeding US$100m in deal size, marking a historic low since 2010 by proceeds. Japan was the only market in Asia-Pacific to see a slight increase in deal count in the first quarter, with the Nikkei Index hitting an all-time high in February.

The EMEIA IPO market witnessed an impressive growth at the start of the year, launching 116 IPOs totalling US$9.5bn in the first quarter, up 40% and 58% YOY, respectively. This surge was attributed to larger average deal sizes from IPOs in Europe and India, which enabled EMEIA to maintain first place in global IPO market share by proceeds since Q4 2023. Since 2019, India has rapidly gained prominence, particularly in the number of IPOs, and has now emerged as a standout performer.


Record inflows to equity funds in feisty Q1 2024 for UK investors

UK investors continued their stampede into equity funds in March, according to the latest Fund Flow Index (FFI) from Calastone. They added a net £2.30bn to their holdings and ensured Q1 2024 was a record for equity-fund inflows, totalling £6.97bn since January.

Inflows were very concentrated – a feature Calastone’s data has revealed every month since November 2023, when investor sentiment first turned positive again. North American funds were by far the biggest beneficiary, attracting £1.77bn of new capital, taking the Q1 total to a record £5.72bn, more than three times the previous best quarter in Q4 2020 (£1.76bn).

In the four months since December 2023, UK investors have added more cash to North American equity funds than they have in the previous nine years combined (£6.69bn versus £6.38bn).

Global equity funds were the next most popular in March and the first quarter, with inflows of £1.22bn and £3.30bn for each respective period. No records were broken, but Q1 was nevertheless one of the four strongest for the sector in the nine-year history of Calastone’s data.

Emerging market equity funds came third in March, with inflows of £362m. It was not a record quarter for emerging markets but the £700m inflow in Q1 was almost three times the historic quarterly average, indicating strong demand for emerging market equities. Individual country funds are a small category, but Calastone noted inflows to funds focused on India, Japan and South Korea and outflows from those investing in China. Inflows to sector funds were dominated by healthcare.

Europe excluding the UK has had a strong run of inflows in recent months, but these dried up in March, dwindling more than 90% compared to the three-month average to just £37m.

Only Asia-Pacific and UK equity funds saw outflows among geographical sectors, but the UK really stood out. Outflows surged to £823m, their worst month since February 2023 (-£962m) making March the 34th consecutive month to see net selling. Q1 outflows of £2.13bn made for the fourth worst quarter for UK equity funds on Calastone’s record. Income funds, which are heavily weighted to the UK, also saw outflows continue.

ESG equity funds enjoyed continued inflows though at a far slower pace (£691m) than in the previous two months. March inflows to non-ESG equity funds were significantly larger (£1.61bn).

Among other asset classes, fixed income fund inflows accelerated to their best level since June 2023. Investors added a net £460m to their holdings. Mixed asset funds and the property sector saw outflows continue.


RTP Network breaks instant payments records

The Clearing House’s RTP network experienced a record 76 million transactions in the first quarter of 2024, valued at US$42bn. March was also a record month with nearly 27 million transactions, and 1 March is now the single day with the most transactions at over 1.25 million.

The organic volume growth comes from customers of financial institutions who use the network to move money and make payments instantly. In March, transactions between accounts (A2A) or from digital wallets to checking or savings accounts increased by more than 1 million payments as consumers chose to move money instantly between accounts for a variety of reasons, including opening new accounts, covering unexpected expenses, or paying bills.

Small businesses are also using instant payments to get immediate access to funds through merchant settlement providers that use the RTP network. Instant payments help normalise cash flow and give business owners access to funds exactly when they need it to pay employees, purchase additional inventory, or pay unexpected expenses. There were 140,000 more transactions in March than in February on the RTP network related to merchant settlement activity for small businesses, demonstrating again how businesses and consumers alike value instant access to their money.

The surge in instant payment transactions continues an impressive quarterly trend for the RTP network. Both transaction volume and value on the network are growing at an average of 15% per quarter, with 19 out of the last 20 quarters showing growth, dating back to 2019. 

“RTP transaction volume is driven by customers who want instant, convenient ways to pay bills, move money between accounts, get paid quickly, send money to friends and family, or solve cash flow concerns,” said Margaret Weichert, Chief Product Officer at The Clearing House. “Banks and credit unions yet to join the RTP network should consider the valuable benefits they can offer their customers and members either directly or indirectly through service providers since, once on the network, they will have access to record transaction flows on day one.”


PwC partners with Google Cloud on tax compliance strategy

PwC is working with Google Cloud to develop and deploy a new data platform to facilitate the delivery of its Connected Tax Compliance strategy globally. The offering combines PwC’s tax experience across more than 150 countries with Google Cloud’s data analytics, cloud, and artificial intelligence capabilities. The two organisations will focus on delivering a modern and flexible tax compliance solution to meet the challenges presented by an increasingly complex, data-driven global tax reporting and regulatory environment.

As Pillar Two requirements take shape, which implement a 15% minimum tax on a global basis, multinational businesses face resource and upskilling demands, operating model changes, evolving data and system needs and new compliance requirements. As a result, the need for complete, timely, and accurate tax data continues to grow as e-reporting and e-invoicing compliance models expand. This is prompting CFOs and Tax Directors to seek ways to realise enterprise resource planning (ERP) modernisation programs. PwC and Google Cloud believe their combined skills, experience, and technology will create solutions that deliver sustained outcomes for their clients and build trust in the data reported to regulators and used to make business decisions.

PwC has collaborated with Google Cloud on an advanced tax data controls and analytics solution that provides real-time visibility into tax data insights, controls checks, exceptions testing, and reconciliations to complement and extend most existing tax calculation and reporting technologies on the market today. The solution will be hosted on Google Cloud and leverage BigQuery, Vertex AI, and Google Cloud Cortex Framework to enable seamless integration with business applications like SAP S/4 HANA. The solution will be powered by PwC’s catalogue of tax data dictionaries and its library of validations, rules, analytics, process intelligence diagnostics, tax rates, and reconciliations. It will cover corporate taxes, transfer pricing, Pillar Two, indirect and withholding taxes, and environmental, social, and governance (ESG) tax reporting. PwC will also offer clients flexible sourcing options and a wider set of tax compliance services, such as tax data management, continuous controls testing, and e-invoicing and e-reporting services, in addition to its core existing tax compliance capabilities.

“Our Connected Tax Compliance campaign is about empowering clients through data-driven reporting that efficiently meets the evolving regulatory landscape,” said Carol Stubbings, Global Markets and Tax & Legal Services (TLS) Leader, PwC UK. “This is the value we bring to our clients, providing innovative solutions utilising the strength of our partnerships and combined expertise.”


Currencycloud and Finyoz look to enhance supply chain financing

Finyoz, a lendtech platform specialising in short-term invoice financing, has joined forces with Currencycloud, a service provider in simplifying business transactions across multiple currencies. The strategic partnership aims to potentially advance supply chain financing, using modern technology and financial expertise.

Finyoz’s platform acts as a bridge between companies seeking short-term invoice financing solutions and private or corporate treasury investors. Through an online interface, companies can upload invoices, view financing fees, and communicate with debtors. Investors, in turn, gain access to a curated selection of investment opportunities spanning periods from 14 to 90 days, receiving interest payments throughout the investment period.

The collaboration with Currencycloud introduces an enhancement to Finyoz's offering. Investors now have the flexibility to collect funds in their preferred currency, which can then be converted to the currency of the borrower. Additionally, investors can leverage digital wallets provided by Currencycloud to deploy funds across various investment avenues efficiently.


Bancomat and Nexi work on centralised payment infrastructure

Bancomat and Nexi have signed a contract for the creation of a new centralised technological infrastructure that will allow the Italian interbank network to autonomously manage and optimise the offer of innovative and high value-added payment services.

The infrastructure is designed to allow banks and payment market operators to significantly reduce the lead time for the development of new products and services, expand their offering, and guarantee advantages in terms of simpler processes, more control and better governance.

Bancomat leads the debit card payments market in Italy, with approximately 2 billion payment and withdrawal transactions, worth over €160bn each year, with approximately 34 million cards in circulation. It is owned by 122 Italian banks; part of over 400 that use its services.

The agreement will create a single Bancomat Application Center, through which the acquirers’ physical and virtual Points of Sale (POS) and automated teller machines (ATMs) will be able to communicate with the authorisation systems of the issuers. This aims to ensure that Bancomat retains direct control over the value chain, as well as innovation and regulatory adjustments.


CaixaBank studies the prevention of cyberthreats by using AI tools

CaixaBank will be part of two European consortia to prevent cyberthreats and provide a faster and more secure response in the face of potential incidents. Via two projects financed by the European Commission under the scope of the Digital Europe programme, the bank will implement AI tools to generate solutions and services that contribute to increasing the security for activities carried out by financial institutions.

CaixaBank is the only Spanish company participating in both projects, called INTERSOC and NG-SOC, and it will lead the assessment and application of the solutions provided from the point of view of the financial sector. Both projects share the same ultimate goal, which is to improve the industry's ability to detect and respond to threats, as well as generating a collaborative ecosystem among the different SOCs (security operation centres) that helps in improving all of their abilities.

With a three-year horizon (up until the end of December 2026), both projects funded in the call for proposals ‘Strengthening the capabilities of the Security Operation Centres’ will aim to detect new attack patterns, as well as generating systems for the exchange of information, knowledge, analysis and faster responses at both national and European levels, in line with the good practices established by the CSIRT Network and CERT-EU (the response teams responsible for dealing with computer security incidents affecting Spain and the EU, respectively). 


TD and Google Cloud enter strategic relationship to innovate banking experiences

TD Bank Group (TD) and Google Cloud have announced a multi-year strategic relationship. TD will add Google Cloud services to its portfolio of data-driven technology solutions to support its delivery of innovative banking experiences. Google Kubernetes Engine (GKE) already supports TD Securities Automated Trading (TDSAT), designed to enable TD Securities to adapt and quickly respond to changing market and client needs in a fast-paced environment.

Google Cloud will work with TD to help streamline application development and deployment and enable the bank to respond quickly to changing customer expectations by rolling out new features, updates, or entirely new financial products at an accelerated pace. TD will benefit from Google Cloud's engineering support, which includes Google's global network of engineers, to help its teams optimise the use of Google Cloud products as well as architect, design and operate them in a highly regulated environment.

TDSAT, a Chicago-based subsidiary of TD Securities, began using Google Cloud's infrastructure with the goal of delivering world-class technology automation and quantitative modeling to fixed income markets. Leveraging Google Cloud, the TDSAT team has constructed a data-driven research platform that scales alongside the business, supplying the technology required to process the large research workloads associated with TDSAT's data-driven approach to trading.


Synovus introduces business payments solution

Synovus has launched Accelerate Pay, a payment solution designed to enable commercial banking clients to initiate account payable payments in several different payment types while minimising the use of cheques. The solution offers payees the freedom to choose how they want to get paid, with cheque payments and e-cheques still an option.

When payment types are added, Synovus clients can take advantage of new options without altering their systems, payment initiation workflow or reconcilement processes.

In addition to helping Synovus clients eliminate cheque payments, Accelerate Pay offers hands-free payment origination and account reconciliation and ERP or accounting application integration with implementation in minutes or hours. It also includes built-in payment fraud mitigation.

Synovus partners with Echo Health Inc. and DPX Payments LLC to offer Accelerate Pay to its clients. This is the latest addition to the Synovus treasury and payment solutions Accelerate suite, joining Accelerate AR and FX.

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