Current IPO indicator signals market upturn in new issues
Deutsche Börse opened the 8th Entry and General Standard Conference in Frankfurt today. The event takes place from 7 to 9 May 2012 and is aimed at listed companies in the Entry and General Standards as well as investors and analysts. Over 70 young companies and SMEs will present their business models and the figures from their latest annual financial statements as part of an investor and analysts’ conference. In addition, current financing and capital market issues will be discussed in relation to the needs of exchange-listed SMEs.
“It is a good sign of the quality of Frankfurt as a financial center and Germany as a business location that so many entrepreneurs and investors are meeting today to share ideas and discuss useful financing models. With its Entry and General Standard Conference, Deutsche Börse is making an important contribution towards enabling investments and innovation to be financed,” said Frank Gerstenschläger, member of the Executive Board of Deutsche Börse AG.
Deutsche Börse also published the current IPO sentiment indicator forecasting issue activity for the 2nd quarter of 2012 on Monday. As Deutsche Börse’s survey of market participants shows, considerably more issue activity is expected in the coming months. However the indicator for the primary market has remained almost constant in the last three months, rising slightly from 29.23 to 29.78 points.
While perceived underpricing is at a historically low level, the IPO climate has improved again. The study also showed that investors especially continue to see the valuation level on the markets as attractive. This indicates a new trend in the sentiment of market participants.
Equity market volatility remains low despite all the uncertainties. Expected volatility for DAX shares currently stands at 22.5 percent on the VDAX-NEW index. This low volatility is seen as a positive influence on issuing activity.
The IPO sentiment indicator was developed by the Center for Entrepreneurial and Financial Studies (CEFS) at the Technical University of Munich together with Deutsche Börse. The indicator is compiled from surveys of market participants about the IPO climate and calculations by the TU Munich based on Deutsche Börse’s trading data. This mood barometer for the primary market is published quarterly and provides investors, issuers and banks a tool with which to assess the market situation.