The year began with the market for initial public offerings (IPOs) at a standstill in the US. Not a single IPO priced during January, the first month without a single offering since September 2011.
Over 2015, a total of 170 companies launched into the US public markets and collectively raised US$30bn, according to Renaissance Capital. The investment banking firm reports that of the total, 78 newly public companies were from the healthcare sector.
Last year’s total was down on 2014, when 275 companies went public in the US and raised US$85.3bn.
January’s dearth of IPOs was attributed to global stock market volatility over the first two weeks of 2016, which signalled a broad retreat from risk by investors.
Meanwhile, research from PwC suggests that the London IPO market, which hit a record high in 2015, is unlikely to enjoy as good a year in 2016.
Ongoing market volatility, concerns over global growth, and a worsening oil price rout mean that more companies are expected to postpone or call off planned IPOs. Although last year was a good one for the market overall, a total of 61 IPOs were postponed or withdrawn compared to 49 in 2014.
Of those postponements in 2015, 44 were due to market conditions, while market and economic factors combined to reduce IPO proceeds by 16%.
“This year, I would expect to see the number of companies coming to market to marginally decline, as investors continue to scrutinise investment opportunities and those that can wait, will wait,” said Vivienne Maclachlan, capital markets director at PwC.
“As we start 2016, a cold chill has descended across pretty much every market globally – this is certainly a more complex climate to that of 2015 and indeed 2014.”
A survey conducted by Capital One suggests around five in six plan to implement new treasury management products and services in the coming year.
The European Central Bank will extend its quantitative easing programme for nine months beyond next March, but scale back the level of bond buying from €80bn to €60bn a month.
The agreement, after three years of debate, raise questions on future investment demand, but Fitch Ratings doesnʼt anticipate major market disruption.
The European Commission fined Credit Agricole, HSBC and JPMorgan Chase a total of €485m for manipulating the price of the financial benchmark.