Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Exchange executives have warned that public markets are “under threat” from the rapid rise of private capital after a slump in global stock listings.
The World Federation of Exchanges, an umbrella group for exchanges around the world, said the numbers were a sign of complacency about the “vitality and durability” of public markets.
“The fundamental role of public markets in supporting innovation, job creation, and equitable wealth distribution is under threat,” WFE chief executive Nandini Sukumar wrote in an open letter on Thursday signed by senior executives from 18 exchange groups, including Nasdaq, Deutsche Börse and Hong Kong Exchanges and Clearing.
WFE data showed that globally, 1,133 initial public offerings took place in 2024, compared with 1,459 in 2020, a 22 per cent decline over five years.
The warning comes as politicians and regulators globally are grappling with how to revitalise their national stock markets, many of which have faced a lack of listings in recent years as companies choose to stay private for longer.
Earlier this week, UK chancellor Rachel Reeves emphasised efforts to boost London’s stock market by simplifying the listing process for companies. Late last year, the EU introduced new listings rules to make it easier to go public, and more attractive for company executives to float their businesses.
The WFE said the rise of private capital and alternative assets such as cryptocurrencies, alongside declining public market liquidity and valuations, “has led to a worrying dislocation”, adding that the issue was most acute in Europe and Asia.
Private equity groups globally are facing a backlog of unsold assets, and many are rethinking their exit strategies as they concede that the multiyear stagnation in IPOs is unlikely to end soon.
“Companies are staying private longer or bypassing public markets entirely. Investors are looking elsewhere,” said Sukumar.
Bankers had hoped for a listings renaissance this year, but some high-profile deals have been derailed by the market volatility sparked by US President Donald Trump’s trade war, with German medical technology company Brainlab and car parts retailer Autodoc delaying their listings. The dearth of IPOs has come despite several stock market indices, including the FTSE 100 and S&P 500, hitting record highs this year.
The WFE called on global policymakers, regulators, companies and investors to focus on reviving stock markets by aligning public and private markets — instead of seeing them as competitors — creating policy incentives for companies to list and investors to back them, and reducing market fragmentation.
