Zhitong Financial APP learned that fears of recession and the war between Russia and Ukraine sent a chill to equity capital markets in the second quarter, preventing investment banks from making generous fees by underwriting stocks during the IPO process. Equity capital market transaction fees for global investment banks fell 74 per cent to $2.6 billion between the end of March and June 21, according to Refinitiv; global IPO and other financing activities of listed companies totaled $94 billion, only 1/4 of the same period last year, dragged down by the US and European markets.

Circulation in the US and Europe, which traditionally account for about 60 per cent of the global IPO market, plunged 96 per cent in the second quarter from a year earlier, accounting for only 9 per cent of global circulation.

A number of companies cancel their listing plans

Investment banks hope that market conditions will improve in the second half of this year, with luxury carmaker Porsche, chipmaker ARM and skincare company Galderma expected to go public in the next IPO window.

However, a number of companies planning to go public in 2022 delayed IPO. Among them, ABB, a Swiss engineering company, postponed its electric vehicle charging business IPO last week, citing challenging market conditions, while Italy's Eni delayed the listing of its retail and renewable energy sectors for the same reason.

Other US companies have taken similar steps, including Reddit Inc, a social media site, and Mobileye, Intel Corp's self-driving car division.

Brad Miller, head of equity capital markets for the Americas at UBS, said: "most of the growth companies seeking IPO in areas such as technology, healthcare and consumers have postponed the listing date to after International Labour Day of the United States."

Miller also said that some companies planning to go public have even postponed the IPO date to 2023 or when inflation, interest rates and market prospects are clearer.

The listing of SPAC is also affected

Current poor market conditions also have an impact on SPAC (blank check companies or special purpose buyout companies). Investor interest in them has waned and regulatory scrutiny has been tightened.

Chinese banks move up the rankings

The decline in equity underwriting, including traditional IPO, has changed the situation in which US investment banks usually take the lead.

So far this year, as many as five Chinese banks have ranked in the top 10 in terms of equity capital market fees, while only Citic ranked ninth last year.