NYSE President says IPO proceeds have dropped by 93% this year

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The economic uncertainty that has plagued financial markets for the better part of this year has affected the companies filing for initial public offerings (IPOs). Proceeds from IPOs have dropped by 93% this year alone, according to the President of the New York Stock Exchange, Lynn Martin.

IPO proceeds drop 93% this year

While speaking at the Reuters NEXT Conference, Martin said that this year, uncertainty and hostile market forces had affected the stock markets. In 2021, the world’s largest exchange reported a record for IPOs amid a rise in special purpose acquisition companies (SPACs).

However, in 2022, the high inflation levels and the hike of interest rates by the Federal Reserve have reduced investor appetite. Moreover, the high number of SPACs has attracted the attention of regulators.

Martin, who joined the NYSE over two decades ago, believes that companies are hesitant to join the market because of the high volatility. He added that companies were uncertain of what would happen during the IPO day or in the following weeks and months. She noted that companies wanted to go public, but the current market conditions would not allow it.

While the IPO market is down, the issuance of Exchange Traded Funds was on the way to reaching a new record this year. She noted that around 250 ETFs were launched in the market during the year, and more were on the way in December.

The parent company of the NYSE, the Intercontinental Exchange Inc, released its Q3 financial report that topped earlier estimates. Despite the reluctance of companies to file for IPOs, there has been a notable increase in trading volumes across different asset classes as investors shuffle their portfolios to hedge against risk.

Martin also addressed the recent discussions between the US and Chinese regulators to devise a plan to resolve the conflict over the US inspection of financial audits for Chinese companies listed in the US.

In August, the two countries allowed US auditors to audit accountants based in China. This agreement prevented around 200 Chinese companies from being kicked out of the US stock market.

Martin also added that the exchange had continued to reach out to Chinese companies with plans to list in New York. However, a significant number of these companies would not meet the threshold to qualify for a listing at the NYSE.

NYSE President speaks up on FTX’s collapse

Martin has also addressed the demise of FTX. She noted that the failed exchange did not have a central counterparty to clear trades, which made its bankruptcy filing challenging. She added that the FTX crisis could have complicated things in the crypto market.

The economic uncertainty has also triggered financial stress for many crypto companies. However, the largest collapse has been FTX, given that it was one of the largest cryptocurrency exchanges. The FTX bankruptcy left around one million creditors.

About Ali Raza PRO INVESTOR

Ali is a professional journalist with experience in Web3 journalism and marketing. Ali holds a Master's degree in Finance and enjoys writing about cryptocurrencies and fintech. Ali’s work has been published on a number of leading cryptocurrency publications including Capital.com, CryptoSlate, Securities.io, Invezz.com, Business2Community, BeinCrypto, and more.