[1/2]Goldman Sachs CEO David Solomon speaks during the Goldman Sachs Investor Day at Goldman Sachs headquarters in New York City, U.S., February 28, 2023. REUTERS/Brendan McDermid LICENSE RIGHTS
NEW YORK, Sept 12 (Reuters) – Wall Street investment bankers are optimistic that dealmaking will pick up as new initial public offerings (IPOs) point to a broader recovery.
Goldman Sachs (GS.N) CEO David Solomon said in an interview with Reuters on Tuesday that optimism that the U.S. economy will avoid a recession is prompting capital markets to reopen.
“The environment is definitely better,” said Solomon, who noted that Goldman was involved in most of the stock offerings. “They’re meaningful, they’re going well,” he said.
SoftBank Group Corp’s (9984.T) Arm Holdings, a British chip developer, will likely be able to price its initial public offering at or above the $47 to $51 per share range when its underwriters close on Wednesday Wednesday will close its books on the largest U.S. stock to market in two years, people familiar with the matter say. Grocery delivery service Instacart is also planning to list its shares on the stock market.
“There is activity beneath the surface, the ducks are paddling like crazy and we will see in the next few months how far they move,” CS Venkatakrishnan, CEO of Barclays (BARC.L), told investors at a conference in New York.
However, he added that some conditions must be met for reactivation of deals, including stable market conditions, availability of financing and attractive asset prices.
“In financial assets, you have seen the correction over 18, 24 months and we may be at that point,” Venkatakrishnan said.
Dan Simkowitz, head of investment management at Morgan Stanley (MS.N), said at the conference he expects a “significantly better” deal environment next year, citing an improving capital markets driven by an increasing number of initial public offerings as well as announcements driven by mergers and acquisitions.
Bank of America expects investment banking fees to fall by up to 35% industry-wide in the third quarter, but BofA will likely do better, its chief financial officer Alastair Borthwick said on Monday.
The slowdown in dealmaking had led to thousands of layoffs at investment banks in recent months, including Morgan Stanley (MS.N), Goldman Sachs and Citigroup (CN).
Reporting by Tatiana Bautzer in New York; Editing by Lananh Nguyen, Mark Porter and Jamie Freed
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