Germany's DAX in Frankfurt a day before Porsche's listing, September 28 2022. Picture: REUTERS
“One transaction alone cannot reopen the floodgates of IPO executions. This requires more predictable macro and reduced equity market volatility,” said Antoine de Guillenchmidt, co-head of EMEA equity capital markets at Goldman Sachs. Dealmakers are wrapping up orders for the long-awaited Porsche float, a deal that could see Volkswagen raising up to €9.4bn.
“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 about 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. 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.