Figures from Mergermarket show that global initial public offering (IPO) volume fell 38 per cent year-on-year in the first half of 2016, from 544 deals in the first six months to 2015 to 339.
But a survey of 100 senior executives, conducted by Mergermarket and law firm Reed Smith, found a 58 per cent expectation that the market will re-ignite within the next year. A further 38 per cent said they expect this to happen within the next 24 months.
“The appetite for IPOs has dulled considerably over the last year,” said Nick Cheek, global managing editor at Remark, the publishing and events division of Mergermarket Group.
“The reasons for decline have been well documented including uncertainty surrounding the outcomes of both the 2016 US election the UK's EU referendum – where the Leave result has only succeeded in ratcheting up the volatility.
“Yet despite the uncertainty, the results of our survey suggest that companies globally are optimistic about the future direction of activity.”
James Wilkinson, a Reed Smith corporate partner, said the survey showed “many companies are in the process of taking the necessary steps to prepare for an IPO”.
He added: “There is a backlog of companies that are waiting on the sidelines for the right opportunity.”
The study also examined post-IPO challenges for companies.
Some 59 per cent of respondents said greater public scrutiny was among their top three reservations, while 51 per cent pointed to their stock being the subject of market volatility. Short-termism, shareholder pressure and the risk of litigation were also ranked highly.