The global market for initial public offerings may finally be offering some encouraging signs to investors hungry for returns.
Following a first quarter that was the slowest start to global listings since the financial crisis, the second quarter ushered in several billion-dollar-plus offerings and an average share jump of more than 30%. Danish utility company Dong Energy raised $2.6bn on June 9, China Zheshang Bank Co raised $1.9bn in March, including an overallotment, and food distributor US Foods Holding Corp raised about $1.18bn last month.
Companies are preparing more ambitious offerings, emboldened by the relatively positive performances and size of deals since April, as well as a more stable market. 
Shares of the largest IPOs this year have climbed or stayed even with their listing price, and that’s encouraging for potential investors, according to Stephen Pierce, global head of equity capital markets at Goldman Sachs Group.
“A good number of investors are looking at IPOs as a category of investment that they have to pay attention to, especially as they try to catch up to the benchmarks,” he said.
While less money has been raised overall, shares of companies that went public this year with offerings bigger than $50mn have climbed 35% on average, according to data compiled by Bloomberg, excluding special purpose acquisition companies, real estate investment trusts and funds. The MSCI ACWI Index of global equities is flat for the year.
Already for the third quarter, Japanese messaging service Line Corp is planning the biggest global technology IPO this year, seeking to raise as much as ¥113bn ($1bn) in July. Univision Holdings, the largest Spanish-language broadcaster in the US, is targeting the second half of the year for its initial offering, which could raise as much as $1bn, people with knowledge of the matter said in April.
It wouldn’t take much to be encouraging. Global volume in the year through June 13 plunged 52% to about $36bn, according to data compiled by Bloomberg, compared with $75bn in the same period a year earlier. Concerns about China’s economy, languishing oil prices and uncertainty about central banks’ outlook on interest rates rattled investors’ nerves and kept companies on the sidelines.
European stocks have led the resurgence in the second quarter, as companies and governments sold shares. Corporates listed in the region raised more than half of the $23bn in new shares sold globally from April through June 13, followed by $6.6bn in Asia and $4.5bn in North America, the data compiled by Bloomberg show.
“From a global perspective, the European IPO market has been more consistent year-to-date,” said Liz Myers, head of global equity capital markets at JPMorgan Chase & Co The US and Asia were more sporadic in the first quarter but are “picking up steam” since April, she said.
Dutch companies alone announced a slew of initial offerings in May, setting up the country’s busiest second quarter for IPO announcements in 17 years, according to data compiled by Bloomberg.
One reason is the UK’s looming vote on staying in the European Union on June 23, making IPO candidates eager to act before the outcome, which could upset markets again.
Dong Energy’s IPO is the biggest so far this year. Fourth place also goes to Europe: AS Nederland NV raised €1.02bn ($1.2bn), helping the Dutch government to recoup some of the money it spent bailing out the company’s parent during the financial crisis.
Depending on the outcome of the UK vote, the flurry could continue. If the country stays in the EU, it could diminish fears about volatility and make conditions better for companies to go public, according to Brian Reilly, global head of equity capital markets at Barclays.
In the US, investors reduced bets on equities after a stock market rout through February. Mutual funds hoarded cash and hedge funds - which also posted their worst start to a year since the financial crisis - unloaded stocks. While IPOs can offer the chance of better returns, they also offer more risk because there’s no trading history to evaluate and a shorter history of financial results.
Now, with a sustained rally and the S&P 500 Index having climbed 14% since its February low, investors may be willing to bet on new stocks again.
There are several companies preparing to go public in the US In addition to Univision, American International Group’s mortgage insurer, United Guaranty Corp, filed its initial prospectus in March. The company may seek to raise $700mn to $800mn, people familiar with the matter said in May, giving it a market value of about $4bn.
Jeld-Wen Holding, the maker of windows and doors backed by Onex Corp, filed its initial prospectus on June 1, and could be valued at about $5bn in its IPO, people with knowledge of the matter said in April.
A major factor in the decline of US IPO volume is the dearth of venture capital-backed technology startups.