(Bloomberg) -- A strong first-half showing for European initial public offerings is unlikely to be sustained in the remainder of this year, as political uncertainty and turbulent stock markets shrink the group of issuers eyeing listings.

With Permira-backed sneaker maker Golden Goose Group SpA and Spanish bakery firm Europastry SA having shelved debut plans, the attractiveness of the European market is again in question — particularly as investors sidestep volatility arising from elections in France and the US. 

“There is a more limited time window in the second half of the year, with the period between September and mid-December affected by the US election, so activity may be more muted than the first half,” said James Palmer, Bank of America Corp.’s head of equity capital markets in EMEA. “We are still in a thawing period from what was a pretty long freeze in IPO land.”

The turn in sentiment comes after more than $14 billion was raised on European stock exchanges so far this year, marking the best first-half for the region since the global IPO boom of 2021, according to data compiled by Bloomberg. 

European firms that went public in that time made a bright start, outpacing the broader equity market with an average 10% gain for $100 million-plus IPOs. Such gains are less certain now with European markets recording a tumultuous few weeks. The benchmark Stoxx Europe 600 Index has drifted in early July.

Among large firms gearing up to go public in the second half are Springer Nature, the BC Partners-backed academic publisher mulling a renewed Frankfurt listing attempt that could give it a market value of as much as €7 billion ($7.6 billion). CVC Capital Partners Plc’s Zabka Polska SA is preparing for a Warsaw listing that is expected to value it at $7.5 billion to $8 billion. Both could launch as soon as September.

London Calling  

For London, which has largely missed out on this year’s revival of European IPOs so far, a more tentative candidate is online fashion retailer Shein, which has confidentially filed papers with the UK authorities for a potential listing.

While that could help the City claw back a chunk of the market value lost from companies shifting primary listings to New York, it would not be straightforward. Shein will also have to win over regulators and investors increasingly focused on environmental, social, and governance issues. 

A more meaningful recovery in UK IPO market could be months out, with investors waiting for the dust to settle on the nation’s own general election. “Under the surface, there is improving sentiment around the attraction of going public in the UK and issuers are now starting to plan for listings in a meaningful way,” said Philip Drake, head of UK Equity Capital Markets at Bank of America. 

London has also remained Europe’s top venue for sales of shares in listed companies, a sign of strong investor demand, according to bankers. National Grid Plc raised about £7 billion ($8.9 billion) in fresh capital to help strengthen its electricity networks, while GSK Plc exited from Panadol painkiller maker Haleon Plc for gross proceeds of about £3.9 billion. 

Large Deals

The European equity capital market’s $56 billion offerings this year has been dominated by large deals. More than 55% of the proceeds came from $1 billion-plus deals, the data showed.

Europe IPOs Cling to Gains as Revival Starts to Fade: ECM Watch

The three largest listings in the world this year took place on European exchanges, namely: Spanish beauty group Puig Brands SA, EQT AB’s skincare business Galderma Group AG and buyout giant CVC Capital Partners Plc.

“Looking back over the last six months, we have had a pretty good year,” said BofA’s Palmer. “Leaving aside the IPO boom of 2021, the activity we are seeing now in Europe is inching toward a normalized year for the region’s IPO market.”

This normalization will pave the path for a much easier 2025, with issuers already beginning to ready plans for listings next year, bankers say. 

Listing is expected to be “more episodic,” in the second-half of this year but that will change into 2025, where there will be “a broader and busier IPO calendar,” said Lawrence Jamieson, co-head of equity capital markets for Europe, the Middle East and Africa business at Barclays Plc. 

“One reason to be optimistic is that there’s no shortage of capital to put to work - for right assets at the right valuation,” he said. 

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