Europe’s record IPO year has a sting in its tail

Europe’s record year for initial public offerings (IPOs) is threatening to come to a juddering halt as inflation fears and concerns over a property crisis in China have soured investors’ appetite for new stock listings.

Deal cancellations and postponements have started to hit the screens with France’s Icade Sante and Switzerland’s Chronext pulling deals in the past week.

Czech company Eurowag pushed through a reduced-size London IPO on Friday, but the trucking services group’s stock fell 10 per cent from its 150 pence offer price.

Many companies that listed earlier in the year are trading below their IPO price, with the FTSE Renaissance IPO Index for the Europe, Middle East and Africa region down 9.19 per cent so far this year.

“Fear of inflation and rising interest rates, as well as uncertainty around China, have made many investors more cautious,” said Christoph Lang, head of core equities in Europe for J. Safra Sarasin. “The Goldilocks environment we had for the last twelve months is over.”

The United States has also been hit by the shift in investors’ mood, with Peleton rival iFIT dropping its IPO plans, while shares in fitness centre operator Life Time’s opened 8 per cent below their offer price on its debut. ,

Europe’s record year for initial public offerings (IPOs) is threatening to come to a juddering halt as inflation fears and concerns over a property crisis in China have soured investors’ appetite for new stock listings.

Deal cancellations and postponements have started to hit the screens with France’s Icade Sante and Switzerland’s Chronext pulling deals in the past week.

Czech company Eurowag pushed through a reduced-size London IPO on Friday, but the trucking services group’s stock fell 10 per cent from its 150 pence offer price.

Many companies that listed earlier in the year are trading below their IPO price, with the FTSE Renaissance IPO Index for the Europe, Middle East and Africa region down 9.19 per cent so far this year.

“Fear of inflation and rising interest rates, as well as uncertainty around China, have made many investors more cautious,” said Christoph Lang, head of core equities in Europe for J. Safra Sarasin. “The Goldilocks environment we had for the last twelve months is over.”

The United States has also been hit by the shift in investors’ mood, with Peleton rival iFIT dropping its IPO plans, while shares in fitness centre operator Life Time’s opened 8 per cent below their offer price on its debut. ,

A few high-profile IPOs are still heading for market, led by Volvo Cars in Sweden, a company that is hoping to tap into the huge appetite for electric vehicle makers and deliver what would be the biggest stock market listing in Europe in 2021.