(BFM Bourse) – The wobble in the financial system has caused market conditions that could lead to a certain wait-and-see attitude in the immediate future. But also potentially medium-term opportunities.
It is an understatement to say that market volatility has been high in recent weeks. Tensions in the banking sector have caused price drops not seen since the start of the conflict in Ukraine. The bankruptcy of Silicon Valley Bank in the United States, the rescue by other establishments of First Republic and, of course, the takeover of Credit Suisse by UBS at a knockdown price were all episodes punctuated by sharp stock market sell-offs.
This reveals market conditions that are not necessarily favorable at first glance to potential operations to enter the Parisian market.
Already the year 2022 had hardly been a good vintage, the fault of a number of elements including the conflict in Ukraine and the acceleration of inflation. The IPO market has collapsed, Allegra Finance listing 36 IPOs last year against 57 in 2021 and 487 million euros in amounts raised against 4 billion in 2021.
The principle is that “to work, an IPO requires a certain stability on the stock market, a rather bullish market and a peaceful geopolitical climate”, recalls Olivier Guignon, partner at Alantra
The firm EY nevertheless judged that the year 2023 could present “favorable conditions” for a resumption of operations.
Market improvement in early 2023
The climate had actually improved at the start of the year, with a good recovery in the equity markets, the CAC 40 having broken records in session on several occasions. “While certain difficulties of 2022 are still present, the market has nevertheless experienced a bullish momentum since the start of the year. companies to see an opportunity to finance themselves on the stock market rather than with banks”, explains Olivier Guignon.
Banking fears have clearly slowed the forward march of the CAC 40, which has even fallen below 7,000 points in recent days. And volatility once again became the norm.
IPOs on the Paris stock market, for their part, remain sluggish for the time being. The specialist in learning to drive online Lepermislibre took the plunge last month. A positive sign, however: Florentaise, the specialist in low-carbon soils, launched its IPO on Wednesday.
Can the recent turmoil on banks hurt this market or have a negative impact? Not so sure. “In the short term, the market turmoil that has recently affected banks may create a wait-and-see attitude on the part of companies who were considering an IPO, for a few days or a few weeks. Companies can wait to see how things develop before to take the plunge”, replies Olivier Guignon.
“Nevertheless, if indeed the European banks are not affected by the difficulties of Credit Suisse, thanks to its takeover by UBS, that the problems of American banks like SVB or First Republic remain limited to the United States, the IPO market should not be affected by this recent turmoil.”
A reinforced attraction of the stock market?
In the medium term, these fears could even translate into a small catalyst for potential IPOs. “These tensions on the banks could even, ultimately, accentuate the tightening of financing conditions in the private off-market. This could further encourage companies to turn to the stock market rather than private financing”, explains Olivier Guignon .
“Certain sectors could arbitrate and consider that it is more appropriate to go through the market to finance themselves. We can think of the energy transition, whose players have good ‘equity stories’, that is to say great stories to tell investors, but which need financing. We can also think of certain sectors of tech which have benefited until recently from rather benevolent financing. But this is less the case at the present time. , he develops.
Remember that Euronext recently unveiled the list of companies benefiting from its dedicated support program with a view to a potential IPO. In France, 39 companies have joined this program. Among them, companies that speak to the general public, including Evaneos, the tailor-made travel specialist who could join Voyageurs du Monde, which is listed on the stock market. We can also mention Withings, the precursor in terms of connected scales and which has extended its range of products to watches which are also connected.
Julien Marion – ©2023 BFM Bourse