Despite an already slow year for initial public offerings (IPOs), the writing on the wall in 2017 is one of the slowest markets for exchanges in recent memory, with projections at levels not seen since the global financial crisis, according to a Bloomberg report.
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2016 was largely an up and down year, with August’s glacial markets eventually giving way towards a high degree of volatility in Q4 2016. What was constant however was the lack of premier listings or frequency of IPOs in Europe and the US.
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The largest issuer in the US during 2016 was the New York Stock Exchange (NYSE), leading the charge with only 119.4 billion – in terms of IPOs, the exchange managed to raise only $13.1 billion, with its largest being ZTO Express with $1.4 billion. By comparison, Facebook’s (NASDAQ:FB) IPO in 2012 alone raised $104.0 billion.
This year, IPOs are already at their lowest level since 2009, though all signs are pointing to an even more muted 2017. This can mostly be pegged on lower overall levels of volatility, which despite receiving a boost in November following the US election, have been much less than historical averages.
As such, the IPO market never had a healthy enough environment in which to thrive during the year, though the issues extend beyond that, mitigating the confidence of IPO investors. Compounding this trend is the fact that markets are operating at all time highs, which helps cap off the amount of bullish activity.
For his part, President-elect Donald Trump has been openly more enthusiastic about the state of the economy, M&A activity, and valuations moving forward. It will remain seen whether this talk materializes into concrete IPO activity in 2017, though the early signs suggest that volatility will have to be sustained for any meaningful gains in this space to be seen.