AFME Q1 2023 Equity Primary Markets and Trading Report | AFME

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Data Research
AFME Q1 2023 Equity Primary Markets and Trading Report
04 May 2023
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Author Julio Suarez Director
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AFME is pleased to circulate its Equity Primary Markets and Trading Report for the first quarter of 2023 (Q1 2023).

The report provides an update on the performance of the equity market in Europe in activities such as primary issuance, Mergers and Acquisitions (M&A), equity liquidity structure, and market valuations.


Key findings:

  • Equity underwriting on European exchanges rose 70% YoY in Q1’23. The increase was driven by the low base in 2022, as Q1’22 represented the lowest issued amount in over a decade. The Q1’23 issued amount stood 20% below 2Y and 5Y quarterly averages.
    • IPOs accumulated €1bn in deal value in Q1’23 on 16 deals, a 48% YoY decline continuing a sequence of underwhelming quarters for primary offerings. Two deals represented 80% of the total quarterly issued amount.
    • IPOs on the London Stock Exchange stood at the lowest Q1 deal value since 2009.
    • European SPAC IPOs have visibly declined from a peak of €3.2bn in Q2’21 to no deals in Q1’23.
  • Completed Mergers and Acquisitions (M&A) declined when measured as announced value (-60% YoY) and when measured as completed value (-47% YoY).
    • De-SPACS represented 1% of the total M&A value announced during Q1’23, the same proportion observed in 2022FY but below that during 2021 (5%).
  • Average daily equity trading on European main markets and MTFs stood at €83.3bn in Q1’23, a 15% decrease compared to Q1’22.
  • Double Volume Cap (DVC) update: The number of instruments suspended under the DVC has recently declined to 308, from 551 in December 2022.
    • By geographical location, 185 of the 308 suspended instruments have EU ISINs (or 60% of the total number of suspended instruments), 13 have UK ISINs (4% of suspensions) and 110 from the rest of the world (or 36% of suspensions).
  • European equity trading mix: According to BigXYT data, on-venue trading represented 76% of the total addressable liquidity in Q1’23. Volume traded off-venues, on systematic internalisers and pure OTC, represent the remaining 24% of the volume of the total addressable liquidity.