With Donald Trump heading back to the White House and a likely Republican clean sweep in Congress, IPO bankers will be hoping that the three years of famine are coming to an end and there are four years of feasting ahead of them. So how will Trump's presidency and, just as importantly, Republican control of the two houses of Congress help the IPO market? Trump’s rhetoric, like that of most politicians, can be different to actions, but we should assume a general move towards a more business-friendly environment in the US, especially for the banking sector. US stock markets have rallied hard since the election news, especially mid-cap and bank stocks, with the Russell 2000 mid-market index up 4% on Wednesday’s open and the KBW Bank Index up 8% – outperforming an also buoyant broader market. The animal spirits sparked by lower taxes and deregulation is likely to have a sustained impact at least through the first half of Trump's presidency. It could also lead to further watering down of the proposed additional capital requirements for US banks from the Basel III endgame proposals. One of the areas where the IPO drought has been greatest has been the tech sector, despite the Nasdaq having risen by around 25% in 2024. According to LSEG data, there have been only seven VC-backed tech US IPOs so far in 2024 and not many more in the two preceding years. This compares with 77 such IPOs in 2021 and data from Jay Ritter showing there was an average of 30 VC-backed tech US IPOs in the 2010–2020 period. Large sections of Silicon Valley – in particular leading venture capitalists – have been scathing of the Biden administration’s policies towards the tech sector, in particular its aggressive antitrust stance. A huge swing in tech antitrust policy will drive tech M&A activity allowing big-cap tech companies to buy smaller firms. But higher valuations of publicly listed smaller companies will also provide more attractive comparables for privately owned VC-backed tech companies when they go public. Some of the largest private VC-backed tech decacorns like Stripe and Revolut have recently had large secondary offerings of stock and are likely to be in no rush to IPO. Some of these offerings have been at relatively high valuations meaning that companies need to grow into their new numbers. In my view, the first out of the gate of the giant VC-backed decacorns in the US will be Databricks. The company has an attractive business model with recurring revenues and exposure to the artificial intelligence theme. It has an attractive financial profile with US$2bn–$3bn of revenues growing at 60% per year. In a 2023 fundraising round it was valued at US$43bn. Databricks bankers will be encouraged by the runaway success of Arm Holdings' IPO as an AI play. CoreWeave also plays into this red-hot AI theme. It is an emerging cloud provider that has been raising significant amounts of capital to build data centres with the latest GPU chips. It was recently valued at US$23bn. A tough regulatory approval process resulted in Adobe’s US$20bn acquisition of Figma falling apart recently, making Figma a leading candidate for a 2025 IPO. Other US tech IPOs for 2025 will likely include cloud security provider Netskope, instant messaging platform for video gamers Discord, software for contractors company ServiceTitan, buy now, pay later provider Klarna and neobank Chime. Indian bromance Of course, the 2025 IPO pipeline will not all be about Trump, although his bromance with Indian prime minister Narendra Modi may help overall sentiment towards Indian equities. A once-in-a-generation IPO of Reliance Jio could take place in 2025. The company is India’s number one telecoms and broadband provider with 479 million subscribers. International investors invested US$18bn in recent years to own a 33% stake. The valuation of Reliance Jio is expected to be above US$100bn thanks to the confluence of strong growth, a tech

Donald Trump's victory in the US presidential election is expected to lead to a US withdrawal from international climate cooperation and an abrupt reversal of energy and environmental policy that could stall climate investment. The US is likely to pull out of the Paris Agreement again after withdrawing in 2017 when Trump won his first term, which could affect negotiations at the UN-backed COP29 climate meeting in Baku, Azerbaijan, from November 11–22. Morgan Stanley expects the US to announce its withdrawal from the Paris Agreement in early 2025, and numerous rules under the Environmental Protection Agency could be rolled back, especially if Republicans take complete control of Congress. "The Republican victory is likely to see the US retreat from all global climate initiatives – much like we saw in the first Trump presidency," said Nazmeera Moola, chief sustainability officer of global asset manager Ninety One. While a blanket repeal of president Joe Biden's Inflation Reduction Act is seen as unlikely, as it has created thousands of clean energy jobs in Republican states, it could be scaled back or repurposed by the new administration to fund massive tax cuts. Tax credits for nuclear energy, hydrogen production and carbon removal are likely to survive the next administration due to bipartisan support, whereas electric vehicles and offshore wind incentives could be more prone to repeal, according to Aniket Shah, global head of sustainability and transition strategy at Jefferies. The Department of Energy’s Loan Programs Office is also under political pressure to cease funding clean tech companies and redirect funds for fossil fuel businesses, Shah said. Looser environmental requirements for qualifying hydrogen tax credits, for instance, could support "more questionable climate outcomes", according to Moola. Biden could potentially still use his executive power in his last months in office to preserve his political and environmental legacy by issuing green Treasuries that would part-fund the IRA's budget before leaving office in January. "I think president Biden's administration has likely been studying exactly what lawful action they can take on issues like sustainability and green Treasuries," said Karl Racine, a partner at law firm Hogan Lovells and former attorney general for the District of Columbia. "It wouldn't surprise me if president Biden sought to be as aggressive as he can with his executive power before he departs the White House." Lawyer up In a second Trump administration, the anti-ESG position of Republican states will be supported by heavyweight federal agencies such as the Department of Labor, which regulates pensions and investments, the Securities and Exchange Commission and the Department of Justice. “We'd encourage all ESG fund managers to have a lawyer on the team, or on speed dial. Antitrust risk remains high for asset managers in ESG,” Shah said in a research note on Wednesday. Shah said legal risks regarding asset managers’ fiduciary duty will persist as states continue to enforce anti-ESG laws, and the backlash could lead to widespread "greenhushing" as corporate executives downplay ESG initiatives for fear of legal retaliation. "We're likely to see federal government prerogatives that generally disfavour ESG considerations in financial investments. There will be great pressure on ESG from the federal government," Racine said. The SEC’s climate disclosure rule, which has lawsuits pending, is also expected to be withdrawn under a new Republican chair. However, similar emissions disclosure laws have cleared legal challenges in California, leading to increasingly fragmented climate reporting in the US. “Suddenly corporates have to do different sustainability reporting under different rules in California, the rest of the US, Europe and Canada, it becomes a real headache,” said a senior ESG banker in the US. In the social sphere, the government's diversi

Ukraine's bonds surged after Donald Trump's victory last week, with investors betting the new US president will be able to follow through on his pledge to bring the country's war with Russia to a swift end. Traders were quick to mark up prices in the belief that the incoming president will broker a ceasefire, even though Trump has so far offered little in the way of detail on how he would achieve that goal nor outlined what the consequences could be for Ukraine. Not that any of that has put off investors, who are solely hoping for coupon payments and better recovery values on their debt. “[Investors in] Ukrainian financial assets don’t care about what is best for the Ukrainian people but instead trade on the likelihood of getting paid their coupons,” a fund manager said. “And the chance of a ceasefire has definitely gone up. Whether that is a lasting ceasefire or good for the people of Ukraine remains to be seen." The sovereign’s bonds and GDP-linked warrants surged after Trump's election, with longer maturities experiencing the biggest boost. For example, Ukraine's US$2.95bn 1.75% February 2035s, which were created following the restructuring of the sovereign's debt at the end of August, rose nearly three points in the 48 hours after Tuesday's election result became clear, according to LSEG data, to be bid at 48.75. Some market participants saw the bonds trading even higher, at 49.25 on Thursday. “I think much of these moves are just pure speculation, and perhaps rightly factoring in an increased positive tail risk that a Trump administration pulls US funding, leaving Ukraine isolated and having to concede territory that halts the conflict for now,” said a second fund manager. Some investors and traders did express scepticism. Any ceasefire requires both sides to be open to negotiation and also be willing to concede at least some of their key terms. Russia now occupies around a fifth of the country, which Ukraine is demanding be returned, while Russia wants the territory to be officially annexed and recognised within its borders. “I don’t think either Ukraine or Russia will crumble as quickly as is being touted,” said one trader. Even so, it's not just the sovereign's bonds that were rallying last week. Ukrainian corporates also offer opportunities for investors to play the ceasefire trade, with fund managers eyeing those trading at the lowest cash prices. Energy generation and distribution group DTEK Energy was particularly singled out. “If you were angling for a ceasefire trade then it is better to go for these lower cash price bonds that are also going to be part of any reconstruction phase in the country,” said the second fund manager. “There are the DTEK Energy '27s around [a cash price of] 55, DTEK O&G at 73 and DTEK Renewables, which has already restructured, at 79. There is certainly much more upside than owning something like the Kernel '27s at around 89.” Kernel is a sunflower oil producer. DTEK’s infrastructure in Ukraine has regularly been the target of Russian attacks. “To me, DTEK is one of the most compelling longs in Ukraine,” said the first fund manager, who said the impact of a ceasefire on the company would be huge. "DTEK Energy and Ukraine Railways are my two top picks now.”

The Australian structured finance market has broken multiple annual records, including overall issuance volume, which surpassed the longstanding 2006 total that was set just before the global financial crisis. More than A$70bn (US$46bn) has been printed this year, including A$53.5bn of RMBS and A$11.6bn of auto ABS – both annual bests – while A$3.9bn has been raised from credit card, personal loans and buy now, pay later-backed offerings, according to Westpac. Despite these huge volumes, spreads have compressed, especially across junior tranches, which are clearing at all-time tights. With interest rates on a downward path, dampening investor returns, there are doubts the market can maintain its strength, but fund managers and analysts are confident of a bright future. Phil Strano, senior credit portfolio manager at Yarra Capital Management, which has A$22bn of assets under management, expects the structured finance market to remain strong in 2025, underpinned by rock-solid asset pools, especially for RMBS, and still compelling returns. “If you focus on housing, Australia has very low unemployment and a scarcity of housing, while projected interest rate cuts are set to strengthen household balance sheets. You can never say never, but we typically see any weakness in the RMBS market as a buying opportunity.” The next biggest sector, ABS with auto loans comprising all or part of the pool, is also buttressed by strong fundamentals. “Our outlook for Australian auto ABS remains stable, supported by relatively stable employment trends,” wrote S&P as it reported a drop in auto pool arrears in September to 1.31% from August’s already very low 1.35%. Strano said the scaling back of official interest rate cut projections is a further positive from a buyside perspective. “The market is currently pricing in around 50bp of RBA cuts through 2025, which is down from 150bp just two months ago. If you take this viewpoint, then yields are going to remain at pretty attractive levels for investors, particularly in historical terms,” he said. “Senior tranche RMBS spreads have settled in the low 100s area, which is roughly double where they were in 2021 and about three times their pre-GFC levels.” For relative value investors, Triple A RMBS/ABS tranches offer a decent pickup over the roughly 70bp margins for major bank Double A rated senior three-year notes, while a longstanding RMBS weakness – low secondary market liquidity – has improved. “We are also seeing a lot more liquidity and a lot more counterparties, which has helped secondary turnover in RMBS exceed that for bank Tier 2 notes in 2023,” Strano said. The amortising nature of securitisations is another reason to expect elevated levels of supply next year, according to Strano’s colleague Roy Mao, a credit analyst and investment manager. “Given the way Triple A RMBS and ABS are structured, investors always get monthly payments and that amortisation creates a natural demand for investors to stay invested and therefore a need for new deals constantly,” he said. Here to stay Elevated overseas appetite for Australian structured finance products is not expected to decline in the foreseeable future, according to Martin Jacques, head of securitisation and covered bond strategy at Westpac. “Offshore interest has picked up, particularly among Japanese investors who a decade ago would usually only gravitate towards major bank RMBS but are now accepting of all asset types from non-bank originators,” he said. Jacques also pointed to increased European and UK interest thanks to the greater volumes on offer and the easily identifiable relative value benefits, notably among auto ABS. He cited Volkswagen’s multicurrency ABS programmes and the BBSW plus 115bp clearing margin for the senior tranche of the A$750m Driver Australia Ten ABS in September. Earlier in September, the &poun

HSBC is restructuring, which will require an immense internal and external comms programme. New businesses, new responsibilities, new reporting lines; there is a lot to do and a lot to communicate. What makes the challenge more interesting is that the communications function is also restructuring and parting ways with its global head. New CEOs tend to retain their inherited comms team, at least for a few months (even, in one case I was close to, when they loathed the head of the function). The argument is that you need a well-oiled comms unit that is used to working together to support the inevitable management reshuffle with subsequent restructuring-related comms activities. With HSBC’s comms function now facing its own uncertainty, its focus might not be 100% on the job at hand. So why would HSBC risk letting its global head of comms go now? For one thing, the remaining lieutenants have the confidence of longstanding chairman Mark Tucker and new CEO Georges Elhedery. Second, the key messaging should not be especially complicated. Whittle it down to its core elements – the fundamental reasons behind the changes – and the rest will follow, across all stakeholder groups, with tweaking for specific interests. Also, when internal and external comms assume a central role at a significant moment, anxieties will be sidelined for a while. When the pressure is on and expectations are high, many of us are in our element and enjoy being in the proverbial thick of it. So, in the short term, the show must go on. The media will be chasing for updates, for leaks of fresh appointments, people leaving, things going wrong, as will HSBC colleagues. All these things will happen, even with the best laid plans. Elhedery and the team around him will be expecting little fires to flare up from time to time. From the top The clincher, of course, is the quality of communication from the top. Comms functions play a critical role when it comes to message advice, dissemination and management, but at times like these the voice that really matters is that of the CEO. Elhedery is a good communicator. He comes across as accessible, genuine and smart. I’m a fan – I've seen him in action. He won’t be startled or concerned by a little commotion here or an indignant departure there. What I am sure he will do is take his responsibilities very seriously when it comes to leadership comms. The tone he sets, the content of his town hall meetings, the effort he puts in to reach across the geographic spread of HSBC will determine how well the restructuring lands internally. It’s the same when engaging with the press and external stakeholders. Communications leaders can guide and support but the responsibility lies with Elhedery and his executive committee. And herein lies the real challenge to the comms team: keeping up the momentum at that senior management level. Even if the messages have been honed, the comms events carefully thought through and the Q&As properly rehearsed, people get tired and enthusiasm wanes. Often in a restructuring there is a gap between the big announcement and the next round of official updates. In HSBC’s case, it will have been four months before further details are disclosed in February when it reports full-year results. That means plenty of time for employees to get jittery and the media to unearth something unexpected while chat rumbles on about what happens to the Hong Kong business. Elhedery has been batting that one away but, given the shape of the restructuring, the question is inevitable – and one that is unlikely to disappear soon. Elhedery can’t do everything on his own and will need the support of his streamlined executive committee. For an organisation as large as HSBC, with its many internal and external stakeholders all wanting a share of Elhedery and his team’s time, it is vital they cover all bases. The comms team members, putting aside their own concerns, m