The year of political pain for initial public offerings (IPOs) just got worse.

Global IPO volumes this year have fallen 35 percent to about $120 billion, according to data compiled by Bloomberg. Donald Trump's surprise victory in the U.S. presidential race Tuesday could mean a further dip in deals while investors work out the effect his policies will have on the economy.

“Institutional investors have very few clues about what a Trump presidency means for the U.S. economy,” said Adam Young, head of equity capital markets at Rothschild & Co. “They will want to digest what the new administration says about its economic policy over the course of the next few months, and that will have a bearing over how much capital they invest in the equity markets.”

Europe saw its share of pain following the U.K.'s June vote to leave the European Union as a slew of companies—including German landlord OfficeFirst, U.K. financial-software maker Misys, and Telefonica SA's O2 unit—canceled IPOs amid low demand.

“Markets will be more stop-and-start,” Young said. “Everyone is more cautious, more fussy, and valuations will be more robustly negotiated.”

More Muted

Still, stock markets' response to the U.S. election result was more muted than post Brexit.

“There were indications that the market might have been 5 to 10 percent off if Trump won, but that hasn't happened yet,” said Richard Penny, a senior fund manager at Legal & General Group Plc. “The market's functioning fully at the moment, though the greater political uncertainty means some people will be less likely to commit cash to new deals.”

With elections in France and Germany next year, as well as an upcoming referendum in Italy, the uncertainty factor may take a while to dissipate.

“We will have a number of European political milestones this year and next year, and investors will be watching them carefully,” said Craig Coben, global head of equity capital markets at Bank of America Corp. “The market has been, and continues to be, open but not indiscriminate.”

Asia, which hasn't had the same political uncertainties, reported the largest share of volumes this year, with companies in the region raising about $64 billion, according to data compiled by Bloomberg. The shares were also the strongest once they were listed, gaining 79 percent, the best performance among geographic regions, according to the data.

Instant Insights /

IPO Landscape Just Got Bleaker

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