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Global IPOs Less Likely to Rebound in 2023: ETFs in Focus
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After a record year, the global market for initial public offerings IPO was off in 2022. Initial public offerings on the New York Stock Exchange (NYSE) just nosedived this year. This year’s listings collapse is the worst since IPO values dropped 73% in 2008, according to Bloomberg data, as quoted on Yahoo Finance.
Renaissance IPO ETF (IPO - Free Report) is off 55.6% this year while Renaissance International IPO ETF (IPOS - Free Report) has lost 33.8% in the year-to-date frame. By Nov 15, just 173 companies made their debut in the U.S. stock market, down more than 82% from the 973 IPOs by the same time last year. Total proceeds raised were $7.7 billion this year, down 94.4% year over year, per Renaissance Capital. U.S. market is likely to record its lowest IPO proceeds since 2003 this year, per EY.
What Caused the Drop?
Rising inflation caused by supply-chain woes and the resultant rise in interest rates, the stock market crash, geopolitical tensions caused by the Russia-Ukraine war, China’s zero-Covid policy and the finally the global growth slowdown led to the mishap in the IPO market.
What Lies Ahead?
It all depends on global growth worries. The IPO activity is not likely to recoil much in the first half of 2023, as fears of an economic slowdown remain. Some analysts believe that activity may recover by the second half of next year, though chances of such a late recovery is also less.
Per Gareth McCartney, global co-head of ECM at UBS, a slow normalization of the IPO market next year is expected. The United States will likely be the first to recoil and there are early signs of a rebound in America with rising block-trade activity, he added.
Among IPOs that are on the radar ahead are Fortnite owner Epic Games Inc., delivery giant Instacart Inc., and sports apparel retailer Fanatics Inc. Europe will follow the United States, although Asia’s recovery will depend on China’s reopening, per UBS, as quoted on Bloomberg.
The article also revealed that Andreas Bernstorff, who heads equity capital markets at BNP Paribas SA believes that “cyclical and value sectors are likely to be in demand, with energy transition and climate tech companies in particular well-positioned to attract strong demand.” With so many deals postponed or scrapped, the IPO pipeline is getting longer.
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Global IPOs Less Likely to Rebound in 2023: ETFs in Focus
After a record year, the global market for initial public offerings IPO was off in 2022. Initial public offerings on the New York Stock Exchange (NYSE) just nosedived this year. This year’s listings collapse is the worst since IPO values dropped 73% in 2008, according to Bloomberg data, as quoted on Yahoo Finance.
Renaissance IPO ETF (IPO - Free Report) is off 55.6% this year while Renaissance International IPO ETF (IPOS - Free Report) has lost 33.8% in the year-to-date frame. By Nov 15, just 173 companies made their debut in the U.S. stock market, down more than 82% from the 973 IPOs by the same time last year. Total proceeds raised were $7.7 billion this year, down 94.4% year over year, per Renaissance Capital. U.S. market is likely to record its lowest IPO proceeds since 2003 this year, per EY.
What Caused the Drop?
Rising inflation caused by supply-chain woes and the resultant rise in interest rates, the stock market crash, geopolitical tensions caused by the Russia-Ukraine war, China’s zero-Covid policy and the finally the global growth slowdown led to the mishap in the IPO market.
What Lies Ahead?
It all depends on global growth worries. The IPO activity is not likely to recoil much in the first half of 2023, as fears of an economic slowdown remain. Some analysts believe that activity may recover by the second half of next year, though chances of such a late recovery is also less.
Per Gareth McCartney, global co-head of ECM at UBS, a slow normalization of the IPO market next year is expected. The United States will likely be the first to recoil and there are early signs of a rebound in America with rising block-trade activity, he added.
Among IPOs that are on the radar ahead are Fortnite owner Epic Games Inc., delivery giant Instacart Inc., and sports apparel retailer Fanatics Inc. Europe will follow the United States, although Asia’s recovery will depend on China’s reopening, per UBS, as quoted on Bloomberg.
The article also revealed that Andreas Bernstorff, who heads equity capital markets at BNP Paribas SA believes that “cyclical and value sectors are likely to be in demand, with energy transition and climate tech companies in particular well-positioned to attract strong demand.” With so many deals postponed or scrapped, the IPO pipeline is getting longer.