The IPO market is struggling this year, with several companies postponing their plans to next year due to volatility and uncertainty, the Wall Street Journal cites bankers, lawyers and corporate executives as saying.

Expectations of a slowdown in September — usually a busy month for IPOs — points to underlying concerns among investors that volatility could continue through the end of the year amid the upcoming US presidential election in November and potential interest rate cuts by the Federal Reserve.

By the numbers: IPOs in the US have raised some USD 25 bn this year, faring well below the USD 55 bn annual average over the past decade. Both Chinese autonomous-driving technology company WeRide and ticket-resale platform StubHub pushed back their IPO plans, while AI chip maker Cerebras is among those considering pushing its IPO to late 2024 or holding off until next year.

Market turbulence has dampened investor confidence, with many companies that went public in the past two and a half years now trading below their IPO prices, with the exception of Reddit's successful IPO earlier in March, up more than 70% from its USD 34 IPO price.

There’s still hope for smaller companies: The Russell 2000 index of smaller companies has outperformed the S&P 500 by more than five percentage points since late June. “Since the majority of IPOs are for relatively small companies — under USD 5 bn in value at the time of their offerings — the recent gains for this group is encouraging,” the WSJ said.

The hometown angle: We have a strong pipeline here at home (read: the IPO Watch section, above), with performance so far this year somewhat mixed. Both Parkin and Spinneys, which debuted on the DFM earlier this year, saw shares jump on their trading debut — with Parkin’s shares up more than 30% YTD, and Spinneys’ shares down 11.2% YTD.

MARKETS THIS MORNING-

Asian markets are up in trading on the back of positive US economic data, and despite mixed labor and inflation data from Japan. Japan’s Nikkei is up 0.46%, while the Topix climbed 0.59% and South Korea’s Kospi gained 0.7%. S&P 500 futures are flatlining, with investors awaiting inflation data from the personal consumption expenditures price index.

ADX

9,233

-0.6% (YTD: -3.6%)

DFM

4,334

+0.2% (YTD: +6.8%)

Nasdaq Dubai UAE20

3,741

+0.2% (YTD: -2.6%)

USD : AED CBUAE

Buy 3.67

Sell 3.67

EIBOR

4.8% o/n

4.5% 1 yr

TASI

12,145

+0.2% (YTD: +1.5%)

EGX30

30,774

+0.2% (YTD: +23.6%)

S&P 500

5,592

0.0% (YTD: +17.2%)

FTSE 100

8,380

+0.4% (YTD: +8.36%)

Euro Stoxx 50

4,966

+1.1% (YTD: 9.8%)

Brent crude

USD 79.94

+1.6%

Natural gas (Nymex)

USD 2.14

+0.2%

Gold

USD 2,552.60

-0.3%

BTC

USD 60,582.12

+3.48% (YTD: +43.3%)

THE CLOSING BELL-

The ADX fell 0.6% yesterday on turnover of AED 910.9 mn. The index is down 3.6% YTD.

In the green: Ras Al Khaimah Co. for White Cement and Construction Materials (+7.8%), Abu Dhabi National Building Materials. (+4.4%) and Ooredoo (+4.4%).

In the red: Al Wathba National Insurance Co (-7.5%), Union Ins. (-7.1%) and Gulf Cement (-4.5%).

Over on the DFM, the index rose 0.2% on turnover of 306.0 mn. Meanwhile, Nasdaq Dubai rose 0.2%.

CORPORATE ACTIONS-

Dubai-based investment firm Amanat Holdings' board proposed a cash dividend distribution of AED 75 mn for 1H 2024, representing 3% of the company's share capital, according to a DFM disclosure (pdf). The distribution will be decided during the upcoming general assembly meeting on 18 September.

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