AFME is pleased to circulate its Equity Primary Markets and Trading quarterly data report for the first quarter of 2025. The report provides detailed data and analysis on the issuance and performance for the equity markets.
Among the main findings of this report:
- Average daily equity trading on European main markets and MTFs increased by 16% YoY. Market liquidity, as measured by turnover ratio (turnover value/market cap) increased from 122% in Q4 2024 to 153% in Q1 2025. The increase in trading activity may be observed as a response to a series of market-relevant announcements in the US in Q1'25 and it remains to be seen whether these elevated flows are sustained over the medium-term.
- Initial Public Offerings (IPOs) saw a decrease of 36% YoY, accumulating €3.2bn in deal value, below the European Q1 average of €6.4bn observed since 2015.
- Secondary offerings were the largest contributor to total capital raised with €30.3bn issued in Q1 2025, a 31% annual increase from Q1 2024. London Stock Exchange leads the way on follow-ons 2025 YtD.
- Mergers and Acquisitions (M&A) activity rose 22% YoY when measured as announced value, while the completed deal value declined by 4% YoY.
- DVC Update: The Double Volume Cap (DVC) mechanism seeks to limit equity trading under the reference price waiver and the negotiated transaction waiver on EU venues. According to ESMA, the number of instruments suspended under the DVC has roughly stabilised since March 2023, with 213 suspended instruments (174 at EU Level and 39 at TV level) as of April 2025.
- Tariffs announced by the U.S. Government in early April 2025 triggered diverse market reactions, including heightened volatility and a shift in trading behaviour. Although not covered in detail in this report, over the first part of the month we observed:
- European stock prices volatility, as measured by the VSTOXX, rose sharply to 47bps from a Q1 2025 average of 18bps.
- Equity average trading volumes on European exchanges peaked at €3.2bn in April 2025, significantly higher than the €0.9bn recorded on the same day in 2024. The largest portion was traded on-exchange, as market participants prioritised speed for execution.
- IPOs Issuance and M&A activity have not been visibly impacted by the introduction of tariffs so far, as IPO and M&A deal values for the first part of April continued at levels similar to those observed in previous years.