FirstFT: Market uncertainty causes longest U.S. tech IPO drought in over 20 years

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Hello. The year-to-date stock market downturn has caused the longest drought in U.S. tech stock prices this century, with experts cautious about the pace of a recovery even after tentative signs of life in other sectors.

Wednesday will mark 238 days without an IPO worth more than $50 million, surpassing previous records set in the aftermath of the 2008 financial crisis and the dotcom crash of the early 2000s, according to research by the Morgan Stanley’s Technology Capital Markets team.

The US stock market has been rocked this year by the Federal Reserve’s battle to reduce inflation through aggressive interest rate hikes. Higher rates affected stock market valuations by reducing the value of future earnings and raised fears that the economy could be pushed into recession.

High-growth tech stocks dominated last year’s record IPO market and saw some of the biggest gains during the stock market boom, but they’ve also been disproportionately hurt by this year’s sell-off. .

The tech-dominated Nasdaq Composite has fallen nearly 28% so far this year, compared to a drop of just over 19% in the S&P 500, while the Renaissance IPO index, which tracks US listed companies over the past two years, is down more than 45 percent.

“There is enormous uncertainty in the market right now, and uncertainty is the enemy of the IPO market,” said Matt Walsh, head of technology equity capital markets at SVB Securities.

“I think we’ll need to see some stabilization in the outlook and investors pull back to buy existing government securities before they’re ready to move away from the risk curve and buy tech IPOs.”

Do you have any comments on today’s newsletter? Let us know at [email protected]. Thanks for reading FirstFT Asia and have a great week. — Sophie

1. Typhoon Nanmadol hits Japan as millions must evacuate The storm made landfall yesterday near the city of Kagoshima on the southern Japanese island of Kyushu with 100mph gusts that damaged buildings and plunged more than 200,000 homes into blackouts. Local authorities have issued non-mandatory evacuation orders for millions of people.

2. Central Banks Set to Hit Rate Peaks at a Faster Pace After the world’s major central banks stepped up their resolve to fight soaring prices, investors are anticipating a steeper rise in interest rates in the coming months. Market expectations for key year-end interest rates have risen as policymakers worry that in the absence of substantial rate hikes, high inflation will prove difficult to change.

3. UBS hires Chinese ‘content reviewers’ to check research reports The Swiss bank is recruiting a team to ensure that its analysts’ Chinese research publications are free of “sensitivities”. The move comes three years after a top UBS economist was suspended in a dispute over comments about pigs in China that were seen as a racial slur.

4. EU to withdraw 7.5 billion euros from Hungary for violation of the rule of law The European Commission yesterday recommended that member states vote to suspend around a third of Hungary’s cohesion funding in response to Budapest’s lack of transparency in awarding public contracts, shortcomings in Hungary’s efforts to fight corruption and weaknesses in prosecuting those who embezzled European funds.

5. China’s cooling economy hits chip start-ups hot In the country’s Covid-ravaged economic climate, workers have sought to switch careers to a priority industry for Beijing – only to find that it too is suffering from the recession and job prospects are darkening.

The day ahead

The Queen’s Funeral Queen Elizabeth II’s state funeral will take place today at Westminster Abbey. 500 Heads of State and foreign dignitaries are expected.

British dockers strike More than 560 port workers and dock maintenance engineers in Liverpool will begin a two-week pay strike from Monday evening.

business profits Haleon, a GSK spin-off, is reporting its first results today since listing on the London Stock Exchange in July.

Join board members and C-suite leaders in person or online for the Cyber ​​Resilience Summit September 21-23 to hear remarks from speakers including Bill Clinton. Register for your pass today.

What else we read

Xi, Modi’s criticism of Putin signals shift in Ukraine war Public rebukes of Russian President Vladimir Putin by China and India signaled a shift in global perceptions of the war, Western officials said, amid efforts by Europe and the United States to erode the international support from the Kremlin.

The race to reinvent the space station American companies, including Jeff Bezos’ Blue Origin and Lockheed Martin, have been spurred by a NASA-funded competition to design private replacements for the International Space Station when it is decommissioned by the end of the decade.

The strange death of the company phone number A growing number of organizations have quietly given up on customer service phone numbers, to the point that some governments are seeking to mandate phone availability. And companies that still offer phone support enjoy a competitive advantage.

What we keep getting wrong about inflation When things get more expensive, that’s inflation – and that’s bad, it seems. But another point of view is that of Milton Friedman: “inflation is always and everywhere a monetary phenomenon”. And this distinction is important, argues Tim Harford.

Liz Truss’ chief of staff ‘engaged’ with FBI in corruption probe Mark Fullbrook, chief of staff to Britain’s new prime minister, said he was cooperating with US authorities as a witness in their investigation into a Conservative party donor accused of illegally providing campaign donations to a former governor of Porto Rico.

sport

Roger Federer, one of the most popular and successful tennis players in the history of the sport, has announced his retirement. He amassed 20 Grand Slam titles in nearly two decades at the top of the game, which made him one of the sport’s top earners.

  • From the archives: In 2019, Federer sat down with Simon Kuper to talk about his job, being a father and what he has in common with Lionel Messi.

Roger Federer

Roger Federer posted a social media post on Thursday explaining his “bittersweet” decision © Neil Hall/EPA-EFE/Shutterstock

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