NEW YORK, Nov 30 (Reuters) – Volatility and market uncertainty have hit the number of companies going public, cutting IPO proceeds by 93% this year, Lynn Martin, president of the New York Stock Exchange, said Wednesday.
“There is a lot of uncertainty and a lot of different forces affecting the markets,” Martin said during an interview at the Reuters NEXT conference.
The NYSE, owned by Intercontinental Exchange Inc., is the world’s largest stock exchange with more than 2,400 listed companies and home to over 3,000 Exchange Traded Funds (ETFs).
Last year was a record for NYSE IPOs, fueled in large part by the boom in special purpose acquisition companies (SPACs), but that activity has slowed to a trickle as high inflation and rising interest rates weighed on market sentiment have and have deducted SPACs regulatory examination.
PIPELINE
“Our pipeline is huge – the reason companies don’t come into the market is the volatility of the market,” said Martin, who worked for IBM as a computer coder before joining the NYSE in 2001.
“They don’t know what they’re getting themselves into on the day of their IPO and, more importantly, in the weeks and months that follow,” she said.
Martin said the companies are “very keen to go public,” but they’re all just waiting for volatility in the market to calm down.
In contrast to the volatile IPO market, exchange trade fund issuance could set another record this year, she said
“We’ve already launched about 250 ETFs this year, and we have a tremendous pipeline going into December,” Martin said.
[1/3] NYSE (The New York Stock Exchange) President Lynn Martin speaks during an event hosted by Reuters NEXT Newsmaker in New York City, U.S. November 30, 2022. REUTERS/Brendan McDermid
NYSE parent ICE reported third-quarter earnings in early November that beat estimates. Even as the global market crisis forced companies to delist their listings, it resulted in an increase in trading volume across asset classes as investors rebalance their portfolios to hedge against risk. Continue reading
Martin also spoke Wednesday about the collapse of crypto exchange FTX, noting that FTX lacked a central counterparty to settle its trades, making its bankruptcy “a bit murky.”
“The FTX situation may have added a layer of complexity to crypto markets in general,” Martin said.
Cryptocurrencies have been under pressure this year after a string of high-profile bankruptcies among crypto lenders and exchanges.
The biggest case was FTX, which collapsed after traders pulled $6 billion from the platform in three days and rival exchange Binance abandoned a bailout deal.
The implosion left an estimated 1 million creditors with losses totaling billions of dollars.
Martin said she was encouraged by talks between US and Chinese regulators to find “a way forward” to resolve the dispute over US inspection of audits of US-listed Chinese companies.
Washington and Beijing reached an agreement in August that would allow US auditors to inspect China-based accountants, the first step in a process that could prevent some 200 Chinese companies from being delisted from American stock exchanges. Continue reading
Martin said the exchange has continued discussions with Chinese companies hoping to list in New York, but added that “a good chunk” of those companies may not qualify for a listing on the NYSE.
“Those who qualify continue to commit to us,” she said.
To watch the Reuters NEXT conference live on November 30th and December 1st, please click [https://www.reuters.com/world/reuters-next/]
Reporting by John McCrank, Lananh Nguyen and Saeed Azhar in New York and Noor Zainab Hussain in Bengaluru; Edited by Chizu Nomiyama
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