IPO slowdown continues to spread in 2023

IPO — 2022 has been a disappointing year for the economy as a whole due to unforeseen elements like inflation.

As a result, there has been a slowdown in global initial public offerings.

While there were forecasts of an economic rebound for 2023, the Federal Reserve’s continued hike rate indicates that inflation remains a problem.

Furthermore, the IPO slowdown has continued into the first quarter of the year, and it is expected to endure in the coming months.

The news

According to reports, one reason behind the IPO slowdown is that companies are waiting out the effects of the following:

  • The volatile stock markets
  • Higher interest rates
  • Inflation
  • Uncertainty around the banking crisis

On Thursday, an EY report found that 299 companies worldwide went public in the past three months, which is down 8% compared to the same period last year.

Additionally, funds raised from the listing fell by 61% year-on-year to $21.5 billion.

EY reports that the slump follows a 45% drop in IPOs in 2022.

“Through just one quarter of 2023, it was more of the same for the stuttering global IPO market,” the firm said in a released statement.

“Any initial euphoria at the start of the year was quickly dampened by the unexpected inflation and interest rate outlook, with the mood further stifled by the latest turmoil in the global banking system.”


For the past couple of months, investors have been struggling with a higher cost for living and higher interest rates.

Recently, their concerns have grown following a historic upheaval in the banking industry that led to emergency interventions for some prominent financial institutions including:

  • Credit Suisse
  • First Republic Bank
  • Signature Bank
  • Silicon Valley Bank

According to the EY report, the signs indicate that companies are holding out for the stock markets to stabilize and rebound before they list.

Read also: China is spending billions to bail out loans

The banking crisis

In early march, the United States witnessed the second largest US bank failure since the 2008 financial crisis.

Silicon Valley Bank customers quickly pulled their money out before US regulators took over.

However, the collapse created a domino effect that panicked markets and mounted up weight on weaker financial institutions that had already been struggling with the increasing interest rates.

Signature Bank followed a week later before First Republic Bank hit another crisis.

Before a major financial crisis could erupt, central banks and several major players in the industry stepped in with emergency cash to keep the banks afloat.

Regardless, markets have remained on edge.

2022 market

In late 2022, IPO research firm Renaissance Capital reported the slowest period for the IPO market last seen in 2011.

The slowdown, while disappointing, still sparked some hope and optimism that the traditional IPO market would turn around.

However, IPOs for some of the most prospective startups seemed unlikely.

For example, TikTok parent company ByteDance has a significant value, but due to the economic tensions between the US and China, a stock listing isn’t anticipated to happen soon.

Furthermore, Chinese firms could opt to go public in Asia, namely Hong Kong or Shanghai, instead of New York.

US regulators also scrutinized publicly traded Chinese companies in 2022.

For example, the SEC investigated the IPO of Didi, China’s ride hailing app.

2023 Asia market

Asia Pacific EY IPO leader Ringo Choi revealed there was a backlog of firms interested in going public.

According to Choi, there are over 800 companies in the pipeline in mainland China.

However, he also noted that firms worldwide are biding their time after getting discouraged by a lack of returns for companies that went public in the last few months.

“Most of them report a loss,” Choi said. “People start to worry [and say], ‘Well, what’s the meaning for getting an IPO?’ Why don’t they wait?”

He expects the decline to carry into the summer, but things could also turn around with several factors helping investors regain confidence, including:

  • Peaking inflation
  • Softening energy prices
  • The rebound in mainland China’s economy


Ringo Choi believes the global market would recover in the second half of 2023 after already hitting bottom.

“We’re lying on the floor,” he said. “It’s very easy for us to have a rebound.”

He also noted that governments worldwide are trying to promote IPOs in their respective jurisdictions, which could help spark a revival.

John Lee, Hong Kong’s Chief Executive, recently traveled to Saudi Arabia, urging companies to consider listings.

“Once there is evidence of a more stable market with higher certainty, investor confidence should return,” EY wrote in its statement.


Bank stocks have become a prospect amid recession fears

Bank stocks Experts estimate that major economies will either slow down or fall into a recession.

As a result, investors today are abandoning tradition in 2023, piling into major bank stocks.


Between January and late February, the Stoxx Europe 600 Banks index, consisting of 42 major European banks, climbed by 21%.

It hit a five-year high, outperforming the Euro Stoxx 600, its broader benchmark index.

Meanwhile, the KBW Bank tracks 24 of the leading US banks, and it rose by 4% in 2023, slightly outpacing the broader S&P 500.

Following the lows last fall, the two bank-specific indexes have surged.

The economy

However, the economic picture is less encouraging.

The United States and the European Union’s biggest economies are projected to grow sluggishly compared to last year.

Meanwhile, the UK output is expected to decrease.

According to former Treasury Secretary Larry Summers, a sudden recession at some point is risky for the United States.

However, central banks were forced to raise interest rates following the widespread economic weakness coinciding with high inflation.

Regardless, it has been a bonus for banks, allowing them to make larger returns on loans to households and businesses as savers deposit more money into their savings accounts.

While rate hikes have anchored big banks’ stocks, fund managers and analysts said that great confidence in their ability to endure economic storms after the 2008 global financial crisis has also played a role.

“Banks are, generally speaking, much stronger, more resilient, more capable to [withstand] a recession than in the past,” said Roberto Frazzitta, the global head of banking at Bain & Company.

Interest rate increases

Last year, policymakers launched campaigns against the increasing inflation as interest rates in major economies increased.

The steep hikes followed a period of low borrowing costs that began in 2008.

The financial crisis ruined economics, prompting central banks to slash interest rates lows to incentivize spending and investment.

For more than a decade, central banks barely budged.

Investors don’t typically bet on banks in an environment where lower interest rates typically feed into lower lender returns.

Thomas Matthews, a senior markets economist at Capital Economics, said:

“[The] post-crisis period of very low interest rates was seen as very bad for bank profitability, it squeezed their margins.”

However, the rate hiking cycle from 2022, coupled with a few signs of easing up, changed investors’ calculations.

On Tuesday, Fed Chair Jerome Powell said interest rates would rise higher than anticipated.

Read also: Fitch Ratings warns of downgraded credit ratings

Returning investors

Due to the higher potential shareholders’ returns, investors have been drawn back.

For example, Ciaran Callaghan, the head of European equity research at Amundi, said the average dividend yield for European bank stocks is currently at around 7%.

According to Refinitiv data, S&P 500’s dividend yield currently stands at 2.1% while Euro Stoxx 600 is 3.3%.

Additionally, European bank stocks rose sharply in the past six months.

Thomas Matthews attributed Capital Economics’ outperformance to US peers based on how interest rates in the countries using euros are closer to zero than in the United States, which means investors have more to gain from the increasing rates.

He also noted that it could be due to Europe’s remarkable reversal of fortune.

Wholesale natural gas prices in the region hit a record high last August, but they have since tumbled to levels prior to the Ukraine war.

“Only a few months ago, people were talking about a very deep recession in Europe compared to the US,” said Matthrew.

“As those worries have unwound, European banks have done particularly well.”

Structural changes

Right now, European economies are still weak.

Whenever economic activity slows, bank stocks are challenging targets to hit due to banks’ earnings ties to borrowers’ ability to repay loans and satisfy consumers’ and businesses’ appetite for more credit.

However, unlike in 2008, banks are better positioned to endure loan defaults.

Following the global financial crisis, regulators proactively set up measures, requiring lenders to have a sizable capital cushion against future losses.

Lenders must also have enough cash (or assets that can be quickly converted) to repay depositors and other creditors.

Luc Plouvier, a senior portfolio manager at Dutch wealth management firm Van Lanschot Kempen, noted that banks underwent structural changes in the past decade.

“A lot of the regulation that’s been put in place [has] forced these banks to be more liquid, to have much more [of a] capital buffer, to take less risk,” he noted.

Apple and Tesla stocks drop in 4th quarter

Apple: Apple and Tesla are two of the biggest tech entities in the United States, but they are currently dealing with problems with their stocks.

The two companies face significant headwinds in China, which concerns investors.

Apple’s shares fell more than 3% when concerns about the iPhone lineup in the December quarter grew louder.

Meanwhile, Tesla fell by 12% on Tuesday when the company reported that deliveries were below analyst expectations.

China’s influence

The two tech giants’ stock decline can be attributed to challenges occurring in China.

The country accounts for 17% of Apple’s sales and 23% of Tesla’s revenue, which makes it a significant market for the two firms.

Daniel Ives, the senior equity analyst at Wedbush Securities, addressed the companies’ woes, saying:

“China is the heart and lungs of both demand and supply for both Apple and Tesla.”

“The biggest worry for the Street is that the China economy and consumer are reining in spending, and this is an ominous sign.”

He continued:

“In 2022, the worry was supply chain issues and zero Covid-related issues, 2023 is the demand worry and this has cast a major overhang on both Apple and Tesla, which heavily relied on the Chinese consumer.”

iPhone factory problems

Investors are keeping an eye on Apple’s fiscal first-quarter results, which will likely be released later this month and cover the December holiday period.

In October, the largest iPhone factory in Zhengzhou, China, suffered a Covid outbreak.

Foxconn, which runs the factory, set restrictions.

By November, workers protested over a pay dispute, and many employees walked out.

Foxconn attempted to entice them back with bonuses.

Since then, things have settled down.

Reuters reported that the factory was almost back at full operations on Tuesday.

The situation highlighted Apple’s dependence on China for iPhone production.

Following the Covid restriction, the tech giants announced that the factory was operating at a significantly reduced capacity.

Read also: Retailers have Grim Expectations with the 2023 Market


Evercore ISI analysts estimate Apple’s December quarter endured a $5 to $8 billion revenue shortfall.

However, Refinitiv consensus estimates the company could report a 1% annual revenue decline in the December quarter.

As a result, investors who expected a strong showing for the iPhone 14 have grown worried.

However, Apple faces more than just supply chain issues.

China recently overturned its zero-Covid policy in an effort to reopen its economy.

However, there have been Covid-19 outbreaks in large parts of the country, which could influence the demand for iPhones.

IDC research manager Will Wong addressed the issue, saying:

“The key challenge is expected to be on the demand side, especially since resilient high-end consumers may have started to shift their spending to travel while some may have shifted their focus to medical supplies.”

“The shift in spending will pose a key challenge in the short term.”

Tesla delivery

The Tesla share price drop occurred due to a miss in vehicle deliveries.

405,278 cars delivered in the fourth quarter fell below the expectation of 427,000 deliveries.

Demand in China and the supply chain played a role in the decline.

Throughout 2022, Tesla’s Shanghai Gigafactory endured Covid disruptions.

However, analysts also pointed out concern over Chinese consumer demand.

“Tesla will point to supply disruptions and lockdowns as the main problem in China in 2022,” said Bill Russo, the CEO of Shanghai-based Automobility.

“While these are real headwinds, it cannot hide the fact that demand has softened for a variety of reasons, and their order backlog is 70% smaller than it was prior to the Shanghai lockdown.”

Shanghai underwent lockdowns in late March 2022 as the government attempted to control a Covid outbreak.

Read also: Apply For Car Title Loan Using Your Vehicle


Investors have grown concerned that Tesla would decide to cut prices to entice buyers, pressuring margins.

In October, Tesla slashed Model 3 and Model Y prices in China, going back on the prices it made earlier in 2022.

However, another hurdle Tesla faces in China is rising competition from domestic rivals, including Nio and Li Auto.

In addition, there are lower-priced competitors which will launch new models this year.

“Tesla’s models have been in the market for a while and are not as fresh to the Chinese consumer as other alternatives,” offered Russo.

“What we are learning is, EV product life cycles are short as they are shopped for their technology features.”

“Buying an older EV is like buying last year’s smartphone,” he continued.”

“They need new or refreshed models to reignite the market. Just pricing lower can damage their brand in the long run.”


China risks loom over US tech giants Tesla and Apple as share prices plunge

Why are Investors Bullish on Gold? GSI Exchange Explains

The recent global pandemic saw gold prices reach record highs in 2020. Stocks, bonds, and real estate investments seldom get the same spotlight. Precious metals seller GSI Exchange enjoys a prestigious position on the list of the safest online gold sellers in the world. In a candid chat, a top executive at the company explained why gold has always remained a favorite amongst investors from all over the globe.

Numerous big names in the industry are bullish on gold, with most recommending having physical gold close to you. However, given that the current conditions are rife with unfavorable factors, majorly inflation, investors are returning to their roots and urging everyone to follow suit.

GSI Exchange notes the sudden shift in gold purchasing, with buyers closely monitoring daily prices, bidding their time in anticipation of a slight price drop. The moment they notice even a small decrease, buyers seem to be going all in, explains the company.

Dollar instability is also contributing to the lure of buying gold. Not to mention, physical gold is a liquid asset. Against investments like, say, SIPs, an investment in gold seems more convenient. Plus, there never appears to be a shortage of a margin for expansion when it comes to gold, specifically gold mining. This is a definite contributing factor in its heightened demand – the ability to supply without a hitch has undoubtedly worked in its favor.

Lastly, most investors welcome this chance at portfolio diversification. Until recently, they had their hands full chasing the trending investments like crypto. But as they witnessed the crash and burns of such investments, seasoned investors realized the potential of traditional investment forms.

However, readers and customers should be aware that precious metal markets have inherent risks, and could be affected by, including without limitation, economic conditions, political events, and speculative activities.


Prop-Tech Company Continues Nationwide Footprint 

Easy Button Capital (INC) has announced it will be selling equity in a Series A round of funding. CEO Joshua Gayman told interviewers on a conference call that “(We)churned through our angel seed capital much faster than we thought.” 


Now the company will be turning to equity in its latest offering to accredited investors. 


Easy Button Capital is a residential property investment and management technology company. The company allows homeowners to instantly receive an offer for their property over the internet, then it takes that property and manages it for operational cash flow and long-term yield. 


“Technology is at the heart of everything we do,” says Gayman, who did confirm the company is developing proprietary software using machine learning (AI) technology but waved off questions about the firm’s application use of the technology. When pressed on blockchain, Gayman said they do have a development team working on blockchain, specifically around tokenized property assets for investment. “Most of that comes down to when the regulators decide to rule on clarity in the crypto and, more specifically, the ICO markets,” commented Gayman. 


On the Internet of things (IoT), Gayman again declined to comment but did state that he believes changes coming to the industry utilizing IoT, blockchain, and machine learning technology will catapult the entire real estate industry over the next decade.


The I-Buying industry, a niche term categorized under “prop-tech” by investors, has seen significant growth as well as turbulence in recent months. In late 2021, Zillow closed down its i-buying operations. Another large I-Buying company, Opendoor, reported losing $662 Million in 2021 but most recently turned its operational cash flow around, reporting $28M in earnings in Q1 (2022). 


When pressed about earnings losses reported among competitors, Gayman said that disciplined management around cash flow from operations couldn’t be taken seriously enough. 


“Most people think that property management is a 7-10% property expense; it’s actually closer to 40% when you consider all of what it affects plus the intangibles that flow to the hard bottom line.” (Gayman)


“Easy Button” now has multiple investments in 11 US markets and is offering to buy property in all 50 states. The company is headquartered in Scottsdale, Arizona.