Nasdaq COO Friedman Says IPOs Delayed Amid Global Market Turmoilby
Aug. 24 exposed issues in how the U.S. stock market opens
Friedman is widely seen as stock exchange Nasdaq's next CEO
Nasdaq Inc.’s chief operating officer said several companies seeking to access public markets this month have delayed their plans as plunging stock prices have brought global equities close to a bear market.
“We are seeing them pushed back,” Nasdaq COO Adena Friedman said in a Bloomberg Television interview at the World Economic Forum in Davos, Switzerland. “They know that there’s investor demand in a normal market environment. The question is whether there’s demand in this type of market.”
No companies have held initial public offerings in the U.S. so far this year, according to data compiled by Bloomberg.
China’s economy just recorded its weakest annual growth since 1990 at the same time that oil has tumbled. Global equities have slumped 10 percent since the start of the year. The causes of the turmoil are more related to global economics than to market structure, Friedman said.
“There’s been fundamentally a repricing, and I think there’s a fair amount of emotion in markets right now,” she said. Friedman is also Nasdaq’s president and widely considered the front-runner to replace Robert Greifeld as chief executive officer.
Market stability has been questioned in the past year. Concerns were driven home when a wild Aug. 24 trading session roiled hundreds of securities, leaving exchange-traded funds’ prices out of sync with the values of their assets. Paul Singer, the billionaire founder of $27 billion hedge fund firm Elliott Management, said in November that stock and bond markets are structurally “unsound.”
“We’ve done an enormous amount to examine the market-structure elements of Aug. 24,” Friedman said. Losses were especially intense during the opening minutes of trading that day. The event “definitely exposed certain issues related to how the markets open.”
“We’re still working through a lot of the really foundational issues around opening of the market and making sure it’s on time,” she said. “We’ve already made some recommendations, we’ve already looked at some ways that we can do some minor enhancements.”
Nasdaq and NYSE said last month that they are forming a trade group to weigh in on market-structure issues in Washington.