Tariffs, Geopolitics Keep Europe’s IPO Market on Ice

The European IPO market has not experienced a recovery in equity markets because of ongoing geopolitical tensions and U.S. tariff policies. Market volatility has decreased sharply while equity fund inflows remain strong yet investors continue to show hesitation toward new listings.

The sweeping tariffs implemented by President Donald Trump during the previous year caused investors to lose confidence and this wariness continues even though the implementation has been paused. European equities received their second-best investment inflows of the century while the VIX volatility index decreased by approximately 70% from its April peak. The positive market trends have not managed to reduce IPO-related uncertainties.

Seven advisers indicate that investors worry about Middle East tensions specifically the Israel-Iran conflict and the post-IPO performance of newly listed companies. Some issuers show resistance to reducing their valuation levels for market conditions.

Scott McCubbin from EY stated that "There's still nervousness in the system." The market continues to focus on tariffs together with geopolitical risks. Companies prefer to delay their initial public offerings instead of launching deals at reduced prices.

The European capital markets show ongoing weakness despite the recovery of broader market indices. The pipeline of potential listings remains strong but advisers predict that market sentiment needs to improve before companies will attempt to go public.