NEW YORK/LONDON – 26 March 2025: Global equity volumes are falling, indicating challenging times ahead amid escalating trade war volatility, according to the latest ECM Highlights 1Q25 report by Dealogic, a service of ION Analytics. The report also highlights significant asset rotation from the US to undervalued European markets, driven by large European block trade issuances.

While early optimism surrounding a business-friendly new US administration at the start of the year fueled market activity, the sentiment has waned as the US positions itself for trade wars with key partners. This aggressive stance, coupled with a radical domestic agenda, threatens to push the country into recession. Rising trade barriers also threaten a global economic soft landing, with potential inflation spikes and slow central bank cuts. The heightened volatility is making equity deals, particularly IPOs, increasingly difficult to execute, the report notes.

Key insights from the report:

Global ECM volumes decline: Equity issuance reached USD 160.4 billion, down 7.7 percent compared to 1Q24 and down 27.9 percent from 4Q24. The number of deals as of 24 March this year was 1,269, down 22 percent from 1,635 deals in 1Q24. While several large transactions saved issuance figures from a poor quarter, the fall in deal activity was indicative of a more risk-averse market.

IPO volumes grew but market volatility looms: IPO volumes of USD 27.7 billion were up 15.9 percent over last year, but most of the major US and European listings were priced before the US market correction in March. The largest global listing was Japan’s JX Advanced Metals, raising around USD 2.6 billion in March.

US IPO volumes up as tariff woes muddy outlook: US IPO volumes were up 23.8 percent year-on-year (YOY), most priced in January and early February. However, several large listings, including Venture Global (down over 53 percent since listing), are struggling due to tariffs and valuation mismatches, hurting market sentiment. The upcoming US IPOs of Coreweave (expected to price on 27 March), Klarna, and Stubhub, will be a major test in the near-term for US listings in a more volatile market.

EMEA saw growth in secondary sell-down volumes: Despite IPO woes, EMEA ECM activity still grew over 18.9 percent compared to 1Q24, mainly driven by secondary equity sell-downs as European shareholders in particular capitalized on high valuations. European secondary sell-down volumes jumped 38 percent, while US follow-on volumes fell 27.8 percent. Swedish IPO Asker Healthcare will give some cheer at the end of 1Q25, but a host of deal postponements indicates difficult months ahead for European listings.

Hong Kong issuance soared; India slumped: Hong Kong saw a remarkable recovery with USD 18.5 billion in ECM issuance, growing by 11.6x or 1,160 percent from 1Q24, driven by Chinese technology issuance in the wake of the success of AI challenger DeepSeek. Indian volumes significantly declined to USD 6 billion, down 62.2 percent YOY. APAC issuance was up around 2.5 percent YOY.

Samuel Kerr, Head of ECM at Mergermarket, a service of ION Analytics, says, “The beginning of the year was filled with optimism and talks of animal spirits lifting equities and equity capital markets to new highs. This talk has stopped. The only animal spirits affecting markets now are bearish, as trade hostility between the US and other major trading nations intensifies. This has recently pushed US markets into correction and has muddied the picture for ECM deals in the weeks and months ahead, particularly in the case of some IPOs that need a modicum of stability given longer marketing processes. Deals will still get done, but investor capacity for risk has been diminished.”

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**All data accurate as of 24 March 2025.