Market debuts stagnate globally in 2025, burdened by tariffs and market unpredictability.
In 2021, the global equity Initial Public Offerings (IPOs) have taken a nosedive, grappling with a whirlwind of turbulence from various sources. The U.S. tariffs, soaring market volatility, and skyrocketing interest rates have conspired to make those public listings less desirable for businesses, as they inflate funding costs and heighten uncertainties.
According to data from LSEG, as of June 17, global IPO volume has slumped approximately 9.3% year-on-year to a nine-year low of US$44.3 billion. The U.S. market saw a 12% dip to US$12.3 billion in IPO volumes, while Europe suffered a harsh 64% decline to US$5.8 billion. On the flip side, Asia-Pacific IPO volumes showed resilience, rising 28% to a robust US$16.8 billion.
Tensions flared anew in April with U.S. tariffs, which included a 10% blanket levy and targeted duties on its trading partners, causing ripples of unease among global businesses. Despite pauses and negotiations on trade and tariffs, firms remain apprehensive about market demands and investment prospects.
Isabelle Freidheim, founder and managing partner at Athena Capital, warns, "Given the market’s unforeseen volatility, it’s not wise for companies to go public right now. The risk, especially for tech companies struggling with profitability, is significant." She adds, "If the stock plunges post-IPO, recovery can be a challenging endeavor, especially for companies lacking a consistent cash flow or maturity."
Despite the overall chill, China and Japan have experienced a surge in listings, spurred by looser regulations and improved sentiment. Chinese battery giant CATL, for example, raised a whopping US$4.6 billion in the world's largest IPO so far this year, bolstered by renewed market optimism following the U.S. tariff truce.
Despite lingering concerns, some analysts remain optimistic about a resurgence in the second half. US IPO interest appears to be reviving, led by fintech firm Chime's strong debut, with high-profile names like Klarna, Gemini, and Cerebras slated to list toward the end of the year. Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors, whispers, "With U.S., European defense contractors, and Indian consumer names filing, late 2021 could witness a 'trickle-then-torrent' recovery if volatility calms down."
Us tariffs have added to the financial concerns of businesses considering Initial Public Offerings (IPOs), as they increase funding costs and heighten uncertainties. The apprehension towards market demands and investment prospects among firms remains, even with temporary pauses and negotiations on trade and tariffs.
