The global IPO market remains in a slump amid the ongoing instability in the banking sector as well as growing concerns of an impending recession.
Data compiled by Bloomberg indicated that companies have raised just $19.7 billion via initial public offerings to date in 2023. This is a 70% drop from the same period last year and the lowest comparable amount since 2019.
In the United States, IPOs have raised just $3.2 billion so far this year; the steepest fall out of the global IPOs that were assessed in the Bloomberg report. While high inflation and the Federal Reserve’s aggressive interest rate policy deterred investors last year, uncertainty in the banking sector has added to investors’ concerns.
Udhay Furtado, co-head of ECM, Asia Pacific at Citigroup Inc., acknowledged the effect that the Federal Reserve’s consistently tight monetary policy has had on investors’ eagerness to invest. “Rates is the number one issue, and there is a clear debate around how long the tightening lasts or changes direction and at what speed,” Furtado explained.