IPOs in Europe fall to lowest level since 2009, and New York's appeal grows

In the first half of 2023, the European initial public offering (IPO) market continued to experience a significant decline, reaching its lowest level since 2009. Only 34 companies registered, indicating a deep decline in the regional IPO market.

European companies are increasingly choosing to place their shares on the U.S. market instead of on domestic European exchanges. The attraction of New York is becoming even more pronounced as companies such as British chipmaker Arm prefer to raise capital in the U.S. due to a larger pool of investors willing to take risks and fund new ventures.

Even companies already listed on European exchanges are considering entering the US market. In particular, gold explorer AngloGold Ashanti and building materials company CRH are planning to change their listings.

Private companies in Europe are showing less interest in going public, due to the deep concerns of European stock markets, which are trying to stop fast-growing companies. Structurally, however, capital markets in the U.S. are more attractive to venture capital, making Europe less attractive to companies in terms of liquidity.

According to the Association for Financial Markets in Europe (AFME), companies raised only €2.4 billion in IPOs in Europe in the first half of 2023, the lowest in 14 years. Capital raised fell 42% year-on-year.

The decline in the number of companies making IPOs in Europe is worrisome for the regional capital market. The steep decline in the number of IPOs poses a challenge to European regulators and companies and could affect their ability to raise capital and grow internationally. Increased efforts to stimulate local market development could help improve the situation and make Europe more attractive to investors.