NEW YORK: Donald Trump’s victory in the race for the White House is set to inspire companies that have stuck to the sidelines to go public in the United States as soon as next year, capitalising on the stock market’s positive reaction and the president-elect’s promises to cut red tape.
Large rallies emerged across many of the market’s riskiest corners in the wake of Trump’s decisive win, with the Russell 2000 Index jumping to near a three-year high.
The S&P 500 Index traded to a record of its own, cementing that the backdrop for investors to take on risk through buying shares of unproven companies has rarely been better.
The VIX, Wall Street’s “fear gauge” tumbled back to the lowest level since September. “The election was an overhang – it’s not the only factor taken into account – but the outcome will now set up some private equity firms to initiate their processes,” said Steve Parish, co-head of ICR Capital.
“For companies that are starting their process or are on the fence for a 2025 initial public offerings (IPO), this could provide a boost to encourage them to push forward.” Nearly US$40bil has been raised via IPO on US exchanges this year, according to data compiled by Bloomberg.
That’s a 64% jump from the stretch seen in 2023 through Nov 6, but still below the average in the decade before the pandemic – including three quarters of Trump’s first term in office, the data show.
Bitcoin also powered to a record, as investors digested the prospect of the pro-cryptocurrency candidate unleashing a wave of debuts that had been held up for years amid regulatory scrutiny.
That could change if current US Securities and Exchange Commission Chair Gary Gensler steps down. — Bloomberg
