Global Crises and the Dynamics of IPO Activity

A milestone for any private company is the issuance of publicly traded stocks. While the motivations and mechanism of the initial public offer are straightforward, the dynamics of the IPO activity is quite complex. Both the number of initial public offerings and the total capital raised in these offerings fluctuate substantially over time. Trends in global IPO activity are difficult to predict, especially in times of market volatility and global crisis. The global financial crisis beginning in 2008 reduced significantly the activity at the global IPO market and no national IPO market was insulated from the financial crisis. Unlike the developed capital markets, funding development of the Serbian companies through the initial public offerings has not yet been common. The absence of the IPOs at the Serbian capital market could be explained by several of factors: legislative barriers, overall economic environment, availability of debt financing, the selected method and course of privatization process, level of investors’ protection, and ownership structure of the Serbian enterprises.