The signs of life shown by the IPO market, especially in the second half of the year, are giving analysts hope that more companies will be enticed to go public in 2024.
Overall, 108 initial public offerings raised proceeds of about $19.4 billion in 2023, according to Renaissance Capital. That’s up from a dismal 71 IPOs for proceeds of $7.7 billion in 2022, when high inflation and rising interest rates discouraged companies from hitting the market.
This year’s big IPOs included health care products company Kenvue in May, U.K. chip designer Arm Holdings in September and footwear company Birkenstock in October. They accounted for over half of the total IPO proceeds, according to Renaissance Capital. Instacart also had a splashy IPO in late summer.
The IPO market is expected to grow along with the economy as corporate profits are forecast to rise after shaking off an earnings recession. Earnings gains of just under 2% during the fourth quarter of 2023 could be followed by a gain of more than 8% in the first quarter of 2024 and 10% during the second quarter of 2024 for companies in the S&P 500, analysts predict.
The S&P 500 index is on track to close the year with a gain of more than 20%.
Wall Street is increasingly expecting the Fed to achieve its so-called “soft landing” goal by trimming inflation to the central bank’s 2% target without an ensuing recession.
IPO activity could speed up as CEOs gain more confidence that the “soft landing” will happen, according to a Goldman Sachs analysis.
Read more. %20%E2%80%94%20The,to%20go%20public%20in%202024.)
