European stocks have become more attractive, and so too has the IPO market as the number of new listings there grew by 500% in the third quarter, a pace doubling that of the U.S. Weighed down by a 40% decline of new listings in Asia, global volume of IPOs still managed a 10% increase versus the same quarter last year.
The flow of institutional money into European equities has surely provided an environment beneficial for those looking to come public. As the continent seemingly shakes off its recent economic malaise, some $65 billion in U.S. funds flowed into Euro stocks in the first five months of the year while 800 billion Euros worth of domestic inflows were recorded in the last 12 months.
“There is a perception that the majority of the region’s economic problems are behind us and we’re going to see lower volatility levels,” said Josef Ritter, head of equity capital markets for Europe at Deutsche Bank AG (ETR:DBK) (FRA:DBK) (NYSE:DB) in London. “A key theme of this quarter was U.S. investors refocusing on Europe.”
It’s worth noting that the planned U.S. IPOs of Twitter, Alibaba.com Limited (HKG:1688), and Empire State Realty Trust should revert the American market back to a higher volume relative to Europe in the remainder of the year.