Global: Animal spirits tamed

Global ECM volumes dropped in 1Q, as rising equity market volatility dented some of the optimism that propelled dealmakers during the turn of the year. As 2025 kicked off, there was talk of ‘animal spirits’ driving equity markets, particularly in the US, as investors positioned for deregulation and tax cuts when Donald Trump returned to the White House.

But the 47^th president’s focus on tariffs, over tax relief, has soured the mood.

As of 24 March, Global ECM issuance stood at USD 160.4bn, down 7.7% compared to 1Q24 and down 27.9% from 4Q. The number of deals was 1,269 down 22% from 1,635 deals in 1Q24.

Americas ECM volume of USD 70.9bn in the first quarter was a decline of 24.7% from 1Q24. In APAC, ECM issuance was marginally higher, at around USD 50bn in 1Q, up 2.4% from USD 48.7bn over the same period last year.

EMEA issuance was above the first quarter of 2024, with volumes of USD 43.3bn in 1Q25, up 18.9% from last year.

Global IPO volumes were USD 27.7bn, a 15.8% rise from 1Q24, follow-on issuance of USD 109.6bn was a 9.8% decline from 2024, while equity-linked volumes of USD 23.1bn was a 18.6% decline from the first three months of last year.

Issuance in EMEA was driven by multi-billion-dollar follow-ons, particularly block trades.

Substantial surprise sales in names such as Ferrari, Novartis, Universal Music Group and Siemens Healthineers, alongside established disposals by shareholders in Haleon and Galderma, among others, lifted European follow-on volumes to USD 35.7bn.

US listings were also one of the other asset classes above the first quarter last year with major IPOs at the start of the year, notably the USD 1.8bn listing of Venture Global, on 23 January .

The US IPO market appears to be rolling on, for now, with the GPU cloud and AI infrastructure provider Coreweave expected to price an IPO on 27 March, in what should be the new largest US IPO this year, at around USD 2.5bn in deal value.

Buy-now-pay-later provider Klarna, and ticketing software company StubHub are also planning to follow soon after.

All three deals are highly anticipated, but in a market where investors are already nursing large IPO losses and volatility continues to bite, future issuers might need to exercise a degree of caution and price flexibility.

Shares in Venture Global and SailPoint, the second largest US IPO as of 24 March, are both down from offer price, showing how exposed newly listed companies are to market volatility.

Venture’s fall, originally attributed to valuation issues at pricing, has been exacerbated by trade tensions, given its large Chinese operations and retaliatory tariffs placed on US LNG exporters by the Asian superpower.

In Europe, despite the flurry of large blocks, IPO markets have faced mixed fortunes.

While Sweden’s Asker Healthcare, which closed books on 25 March, will add SEK 8.9bn (USD 880m) to IPO volumes, making it Europe’s largest listing YTD. Two other IPOs set to price before Easter, German pharmaceutical firm Stada and Spanish gaming company Cirsa, have now been postponed until at least after the break. German bank OLB, a popular IPO candidate, has been bought by a strategic peer.

In Asia, equity market volatility and trade tensions kept many issuers on the sidelines and Indian deal flow was curtailed by falling domestic stock markets.

But there was a silver lining to this cloud, represented by a renaissance in Hong Kong ECM, primarily driven by a surge in interest in Chinese technology businesses, following the success of AI-firm DeepSeek. This surge in Hong Kong volume lifted APAC issuance slightly above 1Q last year, although on a smaller number of deals.

However, these successes throughout the first quarter appear to be on the margins of a market that is beginning to look trickier than many believed it would be in the nascent days of 2025.

“We didn’t expect the market to be like this,” said one ECM banker looking at his deal pipe. “We knew there was some risk with a second Trump administration, but for the market to react the way it has to some of these policies is something that none of us saw coming, perhaps we were all being naive.”

“But we are all used to volatility over the last few years, and we know how to play the long game.”