Deutsche Börse’s IPO indicator a mood barometer for primary markets

A measurement of the mood on the primary market

New technologies play a central role at Deutsche Börse Group. In its data centres it operates 30 exchanges and trading platforms around the world and supplies the technology for international financial services providers.

Deutsche Börse, together with Prof. Christoph Kaserer of the Center for Entrepreneurial and Financial Studies (CEFS) at the TU Munich, developed a mood barometer for the primary market, the Deutsche Börse IPO Indicator. The goal of the barometer is to deliver a forecast of IPO activity on the German stock market and to expose any possible disconnects between the expectations and demands of the participating parties. The indicator is published quarterly and offers investors, issuers and banks an instrument for evaluating the market. 

Deutsche Börse IPO indicator for Q3/2012

“The IPO market sentiment has generally improved, as the Deutsche Börse IPO indicator shows, the outlook, however, remains very subdued. Despite rising share prices, the outlook for the IPO climate remains dim.

The uncertainty which is still prevailing in equity markets as a result of the ongoing euro crisis has also direct impact on the primary market. Given the price increases in the stock market and the volatility which is developing sideways, the sentiment has indeed improved. However, the Deutsche Börse IPO indicator remains at the low level of the previous quarters. In particular, the IPO climate which reflects the sentiment of market participants is again quite gloomy. Since May, we have seen seven IPOs bringing movement to the primary market, but only two of the newly listed companies are currently levelling above their issue price. Accordingly, the perceived underpricing remains at historically low levels.”

The Deutsche Börse IPO Indicator, which deals extensively with the conditions for IPOs, is the result of a survey among relevant primary market participants – investors, corporations and investment banks taking place every three months. The information they provide about their expectations is then combined with quantitative variables such as stock prices, first day trading profits and volatility.

The Report is available for download below: [wpdm_file id=5]

Also in recent headlines, two new exchange-listed equity index funds from the issuer UBS Global Asset Management have been tradable in Deutsche Börse’s XTF segment since last week.  The two new UBS ETFs enable investors to participate in the performance of enterprises based in Brazil. The MSCI Brazil Index covers large and mid cap companies with a total market capitalisation of 84%. The difference between the two UBS ETFs is the asset class. The class “I” ETF is aimed primarily at institutional investors, and the class “A” ETF at private clients.

The product offering in Deutsche Börse’s XTF segment currently comprises a total of 999 exchange-listed index funds, making it the largest offering of all European stock exchanges. This selection, together with an average monthly trading volume of €12 billion, makes Xetra Europe’s leading trading venue for ETFs.

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