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Investors have more appetite to place their money on initial public offerings (IPOs), as more companies turn to equity capital markets.
More than half of investors polled by US-based global investment bank Goldman Sachs said they have a high-risk appetite for IPOs in the last quarter of the year and the first quarter of 2024.
When asked what their risk appetite will be for IPOs early next year, 41% reported “somewhat high” risk appetite, while an additional 10% cited “very high” risk appetite.
The survey took place in September and included mutual funds, hedge funds, family offices, pensions, crossover funds and sovereign wealth funds.
“With IPO activity picking up since the start of September, our ECM (equity capital market) team has observed several key themes that are driving a more robust market: extensive early investor education differentiated go-to-market strategies, anchor investor support, strong financial profiles and thoughtful tactics to navigate a recovering market successfully,” Goldman Sachs.
IPO activity in the GCC region has continued to increase, with total volumes in the second quarter surpassing those in the first quarter of the year.
At least 13 IPOs during the second quarter raised $1.8 billion, supported by relatively active pipelines across both the public and private sectors combined with increased investors’ awareness of the region’s potential, according to PwC.
Second-quarter IPO proceeds were $1 billion higher than in the previous quarter, if the mega IPO of ADNOC Gas, which raised $2.5 billion in the first quarter, is excluded.
(Writing by Cleofe Maceda; editing by Seban Scaria)
