Clearer messaging on central bank policy in the coming months will boost the market for initial public offerings in 2024 as confidence for companies and investors builds, according to Citigroup Inc.’s head of Australia and New Zealand.
(Bloomberg) — Clearer messaging on central bank policy in the coming months will boost the market for initial public offerings in 2024 as confidence for companies and investors builds, according to Citigroup Inc.’s head of Australia and New Zealand.
“We certainly see a pickup in IPO activity into next year,” Mark Woodruff, said in a Bloomberg TV interview at the Citi Australia & New Zealand Investment Conference in Sydney on Wednesday. “If we look forward into 2024, if we get greater clarity around being toward the top end of the monetary policy cycle, the confidence will come back into the IPO market.”
Australian bankers are grappling with a second consecutive year of sluggish activity and are contending with 2023 to take the mantle of the worst year on record for public share sales. Some firms are pushing plans into next year after delays due to uncertainty in recent months.
Australian data center operator AirTrunk is targeting a 2024 listing in the US. Meantime, Bloomberg reported on Tuesday that Bain Capital has pushed back plans for a A$1 billion ($644 million) public share offer of Virgin Australia Airlines Pty Ltd.
“We can see it changing,” added Woodruff. “Our bankers are busier than ever.”
Woodruff, who joined Citigroup in New York in 2002 and has held senior roles including head of markets for Australia and New Zealand, said that while business sentiment was strong, the uncertainty of central bank actions had delayed some decision making.
“Business sentiment is holding together pretty well,” he said. “We have really strong corporate balance sheets,” while noting “some uncertainty” with central bank policy actions.
Surveys show the corporate sector is weathering higher interest rates better than individuals. The Reserve Bank of Australia remains in wait-and-see mode after 4 percentage points of hikes since May last year as it tried to bring inflation under control.
Signals the RBA is nearing a peak will help lift confidence for IPOs, Woodruff said.
–With assistance from Harry Brumpton.
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