The global Initial Public Offerings (IPO) market, lately in a state of relative lethargy, might soon spring back to action, according to Morgan Stanley's CEO Ted Pick. He anticipates a number of major corporations currently held privately expressing the desire to transition into public markets, consequently driving the expansion of their business operations.
Pick extended this outlook during a conference call following the firm's recent announcement of strong financial results, which showed a surge of over 50% in their third-quarter investment banking revenues from last year. He explained the increased IPO activity as a significant contributor to this growth.
However, Pick predicts that, while the IPO market is set to trend upwards, the process might take time and likely be characterised by sizeable corporations seeking to go public. This implies comparatively slower unit volumes than witnessed during the post-COVID stimulus period filled with quick listings.
The cooling of the IPO market over the year was evidenced by lower listings count and diminished dollar volumes processed in each quarter of 2024, compared to statistics from the previous two years.
"I think we're going to see the IPO market slowly work its way back," Pick stated. "I think these are going to be global mature companies, which very much need our advice."
Banks possessing significant investment banking units stand to benefit from the expected boom in IPO activity. Rekindled confidence in the rebound of IPO and M&A sphere might intrigue investors, according to Bank of America analysts. This sentiment is also shared by other prominent bankers including Goldman Sachs CEO David Solomon, who also predicts a continued upswing in activity.