The global IPO market finally succumbed to negative sentiment in the first half of 2016. While cross-border listings have outperformed domestic listings in every first half since 2013 in terms of market share by value, deals of both types fell dramatically in the first half of this year. They fell more or less in tandem, with domestic deals marginally less affected as the issuers brave enough to come to market sought safety in home markets. The global cross-border index fell to 22.2, remaining above the lowest point recorded in the index in 2013.

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Cross-border deals fell 72% by value and 55% by volume, while domestic deals were down 56% by value and 45% by volume, reflecting both the flight to safety and the fact that smaller deals tend to be domestic. Issuers in total completed just 167 IPOs worldwide, raising just over US$25 billion, the smallest total by some distance since this index was created in 2011. This is US$40 billion less than H1 2015 and 52% less than H1 2012, which was the worst first half since 2011 until now.

Negative sentiment is responsible for these exceptionally low levels of market activity, driven by a convergence of predominantly political event-driven uncertainty, now exacerbated by the United Kingdom’s decision to leave the European Union.

“Our prediction – that uncertainty, which made for a poor end to 2015, would continue to depress activity in 2016, has come to pass. Temporary issues have been driving sentiment in the year to date, with volatility more political than genuinely economic and markets on hold rather than in deep distress”.