Only one offering of note was priced in the first week of 2023, reinforcing expectations that US ECM activity levels will only slowly rebuild in the first quarter as investors fret about higher interest rates, corporate earnings and an oncoming recession.
Biotech Geron late on Thursday took a 23.2% file-to-offer discount to raise US$198m from the week's sole follow-on, a far cry from the same week last year when 10 issuers raised US$3.6bn (including three biotech IPO pricings).
The US IPO market remains stuck in a rut, though there were a few positive signs in the past week.
Skyward Specialty Insurance launched its US$136m Nasdaq IPO for pricing in the coming week, thereby bringing an offering that was delayed from December.
Johnson & Johnson consumer health unit Kenvue also filed in the past week for an upcoming NYSE IPO that could raise US$5bn, though it is not expected to be launched imminently.
A handful of other companies have filed or refreshed their IPO filings in the past month (including Goldman Sachs' renewable energy company MN8 Energy on Friday). Yet few are likely to be launched in the coming week given that they are unlikely to want to run roadshows across the federal holiday on January 16.
The sector mix of upcoming IPO product also looks set to favour companies that are recession-resistant or less correlated to broader markets, leaving little hope for a quick revival in the tech new issue market.
Follow-on issuance could pick up in the coming week. That said, deal flow is likely to remain restrained by earnings blackouts. Issuers are also likely to avoid taking market risk around Thursday's crucial US consumer inflation data release, though a soft number reinforcing hopes that the US economy can stage a soft landing might be the next chance for a broader market rally.