This Is Going to Be Worst Year for IPOs Since the Credit CrisisBy
Here lies the IPO market of 2016, the quietest year for listings since the financial crisis.
Despite the S&P’s 11 percent gain, despite the average 18 percent return for successful IPOs, despite volatility that eased from 2015, the last 12 months have seemed as silent as a graveyard for deals. Going by the number of listings and the amount raised, it hasn’t been this dead for offerings since 2009.
Volatility deserves much of the blame. Even though the VIX has averaged 15.93 this year versus 16.68 in 2015, most of last year’s equity turbulence occurred in the final few months. It takes time for IPOs to return after volatility calms, and the VIX never provided a large enough windows for the IPO market to bounce back. Volatility spiked in each quarter of 2016, sapping the confidence of IPO investors.
New York Stock Exchange president Tom Farley warned in January that patience was needed before listings revived. This week, he said NYSE is doing more pitching and planning for 2017 IPOs than at any point this year. Farley touted a growing backlog of both public and secret IPO filings.
Other positive signs include heightened valuations and expectations for a business-friendly Trump administration, but volatility spikes can come from anywhere and will continue to dictate the listing window for many IPO candidates.
- U.S. ECM Agenda
- Spinoff Watch
- Venture Capital Wrap
- M&A Watch N.A.
- Data according to Bloomberg data at IPO <GO>
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