Discussion on the current state of the IPO market and its impact on the economy. Positive performance of companies and investors leading to a more offensive approach in the IPO market. Survey results on investors' risk appetite and recession expectations. Adapting capital markets to a high interest rate environment. Exploring how investors value companies in the IPO market and the performance of non-profitable companies.
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Quick takeaways
The slow reopening of the IPO market in the Americas region indicates a more offensive and optimistic approach by corporates and investors in 2023.
Companies and investors are adopting a disciplined mindset towards IPOs, reflecting the challenging macro backdrop and high rate environment.
Deep dives
Slow reopening of the IPO market
The podcast discusses the slow reopening of the IPO market in the Americas region in 2023. The number of IPOs priced in September surpassed the total amount of IPO issuance for the first nine months of 2022. This slow reopening is seen as a constructive catalyst within the broader equity capital markets product suite. It indicates a shift in corporates and investors becoming more offensive and optimistic in 2023, following a period of right-sizing positions in the previous year. Despite some volatility and uncertainty in the macro environment, an active and exciting IPO market is anticipated in 2024.
Disciplined mindset and risk appetite in IPOs
The podcast highlights that companies and investors are approaching IPOs more pragmatically and with discipline in the current market. This mindset is a reflection of the challenging macro backdrop and high rate environment. According to a survey of equity market investors, more than 50% of respondents have a high or very high risk appetite for IPOs and new equity issuances. This suggests a positive sentiment and interest in equity capital markets despite the ongoing high interest rate environment. It is noted that companies with strong performance and ample access to the markets have favorable timing opportunities for IPOs.
How are large investors thinking about equity capital markets and the trajectory for the overall economy? Lizzie Reed, global head of the equity syndicate desk in Goldman Sachs Global Banking & Markets, dives into the findings of the team’s survey.