IPOs should come back with more force in 2024, says Nyse VP – 03/04/2023 – Market

The Covid-19 pandemic brought ideal conditions for many companies to put into practice their plans to raise funds through an IPO. The year 2021 was very busy in this sense, in Brazil and in the United States. But since last year, the scenario has changed, and a reversal should only happen in 2024.

The projection is by John Tuttle, vice-president of NYSE (New York Stock Exchange), a company that operates the New York Stock Exchange and also ICE, from London, among other markets around the planet.

He says 2022 was a weak year for IPOs, and that trend continues into 2023. “We had a combination of geopolitical and economic uncertainties that increased risk aversion,” says Tuttle.

According to the Stock Analysis portal, which gathers data from the American capital market, last year there were 181 IPOs in the United States. The number represents a contrast to the 1,035 operations carried out in 2021, breaking the all-time record for IPOs that had already been broken in 2020, with 480 IPOs.

According to Tuttle, episodes such as the war between Russia and Ukraine and the beginning of the interest rate increase cycle by the Fed (Federal Reserve, the US central bank) were key factors for this change in scenario.

“Many companies were ready to carry out their share offerings, and had to review their strategies”, says the Nyse executive.

In 2023, Tuttle’s perception is that the environment is starting to stabilize, even with the banking crisis and the lack of clarity about the Fed’s monetary policy. Even so, the resumption of IPOs must be cautious.

“I believe that we will first see stock offers from companies that are already listed. If they are well received, those that are more ready to go public will start their movements. Depending on the situation, it could happen in the second half of 2023, or only in 2024” .

While IPO numbers were bad last year, Tuttle says other money market instruments have done well. “We had a record of launches of ETFs (Index Funds), for example”. These funds replicate the performance of stock indices and other financial market assets, and are aimed primarily at individuals.

Brazil in the crosshairs

Tuttle came to Brazil with the mission of talking to businessmen and agents in the financial market. He claims that the American Stock Exchange still offers the best conditions for raising money.

“If a company wants to act only locally, I think that the markets in its countries, including Brazil, meet the needs very well. But when the objective is to gain scale and grow internationally, Nyse continues to be the best alternative”, says the executive .

Currently, according to the executive, there are 34 companies listed on the NYSE. Some of them went public directly in New York, such as Nubank and PagSeguro. And he is optimistic about Brazil.

“It is a country with a very diversified industry, and that can be a global leader in several areas. One of them is renewable energy”, says Tuttle.

She claims that, for this segment specifically, the American market offers a good environment to raise funds. “Many large global funds want or even need to place resources in the American market. This becomes a differential for those who want to seek financing for long-term projects”.

On the banking crisis in the United States, Tuttle praises the quick reaction of regulators to the problems presented by SVB (Silicon Valley Bank) and Signature Bank, guaranteeing the deposits of all customers.

“But it is always necessary to look at how to improve the system. We have to have the notion that the whole world looks at the United States, and we affect the markets of all countries”, says the vice president of Nyse.

About the company that he helps run, Tuttle says that Nyse proved to be very resilient during the pandemic. “We keep working all the time. We always think about being well positioned looking at a horizon of 15 to 20 years”.