• European ECM insulated from renewed Gulf hostilities due to blackouts
• Remarkable year for accelerated deals in Europe, despite Middle East war
• AI bubble risks should prompt PE, corporate sellers to move while they can

You can always rely on US President Donald Trump to throw up a few surprises for markets, and the leader of the free world managed to catch investors on the back foot again last week by reigniting the US’s war with Iran.

Many investors had hoped the end was in sight following the signing of a memorandum of understanding (MoU) between the two nations .

Trump now says the MoU between the two countries is “over” and fresh attacks have been initiated on Iran’s Revolutionary Guard, who say they have now shut the Strait of Hormuz.

Ironically, for prospective sellers of European listed stock, this new phase of a seemingly never-ending war probably could not have come at a better time.

Most European businesses are now in blackout periods before the release of second quarter earnings and therefore cannot be the subject of sell-downs in the equity capital markets before 2Q numbers are reported.

“The flare up in Iran actually comes at an opportune time because we’re in the blackout period,” said a banker. “Depending on when they return to the negotiation table, the impact could be minimal,” albeit with the caveat that any resulting inflation spike could have a longer-term effect, he added.

Surprisingly, despite Europe’s reliance on the Persian Gulf for so much of its supply of energy and natural resources, European equity capital markets have proven hugely resilient to the outbreak of the conflict and the closure of the Strait of Hormuz.

The first half of 2026 has been the best for European accelerated sell-downs since the start of 2022 – and with 154 deals priced in 2Q26, it was the busiest quarter since the start of that year.

ECM investors have almost completely looked through the crisis to take on large stakes in European listed businesses.

While IPOs have struggled to gain transaction, the bid for already listed European corporates is stronger than it has ever been, providing liquidity for sponsors exiting already listed businesses and boards seeking non-core disposals, or to fund M&A via a primary capital raise.

While we are yet to see the shape of European corporate finances across a full quarter of higher energy prices, the sentiment in the market is remarkably solid.

“There is a feeling that we aren’t going to see much bad news in the 2Q numbers and that the closure of the Strait of Hormuz is not going to have had too bad an impact on numbers, which really is remarkable,” said a second banker.

Print now or risk market turn

The abiding tale of equity capital markets throughout the year, in European blocks at least, has been that fortune has favoured the bold.

Sellers who have come to market have found investors extraordinarily conducive to dealing despite the geopolitical impact and inflationary risks caused by the war in the Persian Gulf.

Be that through huge capital raises as undertaken by Zurich and Engie earlier this year to fund M&A, or gigantic sponsor sell-downs, like EQT’s CHF 4.9bn (USD 6.3bn) exit of Galderma, or Permira’s PLN 4.4bn (USD 1.2bn) clean-up of Polish e-tailer Allegro.eu, or Bill Ackman’s EUR 1.4bn (USD 1.7bn) exit of Universal Music Group.

Any prospective equity seller must always assess when to sell-down a position in a high stakes balance of the greed/fear dynamic that is so true of all equity investing.

How long conducive markets last is anyone’s guess but ECM bankers say they have almost lost count of the number of times clients miss an opportunity to sell because they are waiting for a slightly higher price.

There are plenty of high-profile disposal targets that investors are keeping an eye on.

This column has highlighted prospective sponsor sell-downs from GPs like Blackstone, with a 74.2% of Spanish gaming company Cirsa.

There is also CVC and Partners Group, which together own 47.63% of Polish retailer Zabka Group.

Keep an eye out for possible corporate sell-downs on the horizon, notably Mercedes-Benz’s holding of Daimler Truck.

“Unless you know of unbelievable earnings coming in 3Q or 4Q it really doesn’t make much sense to wait,” said a third banker.

The two other bankers concurred, noting that their house advice was for clients to push on regardless of the renewed war in the Persian Gulf.

All this should be viewed in the context of a greater concern hanging over markets.

Whispers of overvaluation in AI-linked tech stocks has turned into loud shouts of “bubble”.

This remains a looming fear rather than an imminent risk. Markets remain close to record highs and companies continue to fundraise, notable South Korean chipmaker SK Hynix, which recorded huge demand for its USD 26.5bn ADR sale on the Nasdaq last week.

But several bankers and investors speaking to ECM Pulse over the past few weeks have said that a pullback in tech is the market risk that concerns them the most.

Should there be a reversal in tech valuations, it could impact global stocks and lower the underlying equity values for several sellers that could have executed trades straight after earnings are completed.

While waiting a bit longer could help squeeze some extra alpha form already toppy stocks, the fear of a market correction in the months ahead should push sellers to move while they can.