AFME is pleased to circulate its Equity Primary Markets and Trading Report for the first quarter of 2019 (1Q 2019).
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 equity valuations.
- Equity underwriting on European exchanges accumulated a total of €25.3 bn in proceeds in 1Q19, a 33% decrease from the value originated in 1Q18 (€38.0 bn).
IPO issuance in 1Q19 decreased 94% against the amount issued in 1Q18.
Political uncertainty regarding the future relationship between the UK and the EU may have adversely impacted the European equity primary market as companies delayed capital raising on UK and EU27 exchanges to gather more information on potential implications of Brexit on capital markets.
Only 5 IPOs were issued on UK exchanges during 1Q19— the lowest quarterly number since 2009.
- Completed Mergers and Acquisitions (M&A) of European companies totalled €208.9 bn in 1Q19, an increase of 6% from the amount completed in 1Q18 (€197.8 bn).
The amount of announced M&A deals totalled €166.4 bn in 1Q19, a 51% decrease from 1Q18.
APAC firms represented 77% of the inbound deal value, a sharp increase compared with 28% of the 2018FY inbound value.
One “megadeal” (deal value above €10bn) was completed during 1Q19: Takeda Pharmaceutical-Shire plc. This deal represented 77% of the total deal value in the healthcare industry and 31% of the amount of completed M&A transactions in 1Q19.
- Equity trading activity on European main markets and MTFs generated a total of €2.6 tn in turnover value in 1Q19, a decrease of 18% from 1Q18 (€3.2 tn)
- Update on MiFID II dark trading caps:
In March 2018, ESMA published the double volume cap (DVC) data files specifying the securities that surpassed the MiFID II limits of total dark trading on EU venues.
The number of banned instruments from dark trading has decreased during the last 12 months to 342 instruments, from 755 in March 2018 and from 1,262 in August 2018.
Due to concerns about disruptions of the ESMA IT systems after Brexit (expected initially for late March 2019), ESMA will not perform the DVC calculations in April and May 2019. The publication will be resumed in June 2019.
- 1Q 2019 YoY variation of European Equity activity