2022 a difficult year for IPOs as recession looms, growth prospects fade

Listings fell by 44% worldwide over year-ago period; S'pore IPO scene stays muted

- Kang Wan Chern

The year 2022 is turning out to be a difficult one for companies looking to raise funds in both the public and private markets, with the International Monetary Fund recently warning that the global economy could be in a recession next year.

A combination of high inflation and rising interest rates has resulted in slower growth across many economies and companies are having a harder time raising the funds they need to grow, experts said.

There were a total of 992 initial public offerings (IPOS) worldwide this year so far, representing a 44 percent drop in the number of companies that raised funds from the public over the same period in 2021, data from professional services firm EY showed.

In total, the companies raised US$146 billion (S$208 billion), down by 57 percent over the same period in 2021.

EY said United States exchanges had the sharpest decline in the number of IPOs so far this year, recording only 116 deals that raised US$7.5 billion. That is a decrease of 72 percent in the number of IPOs and 94 percent in proceeds raised year on year, the lowest level of activity in 20 years.

Fund-raising on the Singapore Exchange has been subdued, with six IPOs in the year to date, compared with eight in the whole of last year.