The report provides an update on the performance of the equity market in Europe in areas such as primary issuance, Mergers and Acquisitions (M&A), trading, and valuations.
- Equity underwriting (IPOs, follow-ons and convertibles) on European exchanges accumulated a total of €37.8 bn in proceeds in 1Q18, a 34% decrease from the value originated in 1Q17 (€57.1 bn).
Notwithstanding the annual decline, IPO issuance in 1Q18 more than doubled the amount issued in the first quarter of 2017
- Announced Mergers and Acquisitions (M&A) of European companies totalled €338.5 bn, a 45% increase from 1Q17. This includes the announcement of large megadeals such as Sky-Comcast; E.ON SE- innogy SE; and Albertis-Atlantia/ACS.
Completed M&A of European companies totalled €174.5 bn in 1Q18, a decrease of 20% from 1Q17 (€ 217.8 bn). The decline was in part driven by a 49% decrease in inbound M&A— particularly from lower deal value of inbound deals from APAC companies targeting European companies.
- Equity trading activity on European main markets and MTFs generated a total of €3.2 tn in turnover value in 1Q18, an increase of 8% from 1Q17 (€2.9tn).
- MiFID II dark trading caps: On 7 March 2018, ESMA published the double volume cap (DVC) data files specifying the securities that surpassed the MiFID II limits for dark trading on EU venues. A few observations from the first data batch:
- Of 18,425 equity-like securities, 741 are currently suspended from dark trading either on specific EU venues (15 securities) or on all EU venues (726).
- The instruments suspended are predominantly equity shares of large companies. 620 of the 741 instruments suspended are from companies with market capitalisation above $1bn.
- 304 of the 741 suspended instruments have UK ISINs (i.e. UK as the issuing country).
- Dark trading volume declined in the immediate aftermath of the DVC files publication, while the proportion of dark traded as large-in-scale (LIS) blocks has increased to c40% (from 12% in early 2017).
- Domestic market capitalisation of European listed shares stood at € 13.1 tn at the end of 1Q18, an increase of 1% from the market value at the end of 1Q17 (€13.0 tn).
Annual variation of European Equity activity (EU28 member countries and Switzerland): 1Q18 vs 1Q17