US IPO Returns Fall To Lowest For Fourteen Years.

There is something of a paradox in equities markets at the moment: while the number of US listings has rebounded strongly in the last two months, returns have bottomed out, hitting their lowest levels since Bloomberg records began, back in 1995. Spurred by a rally in the stock market, the US has recorded its largest spate of listings during a two month period for nearly two years. Despite this returning appetite for public offerings (see 'The Unlikely Return Of Retail IPOs'), the bullish sentiment shown by the S&P 500 Index which has seen the index climb by more than 50% from a twelve-year-low in March, has as yet failed to translate into bigger returns for companies going public. Highlighting just how narrow return margins are, offerings by US companies have historically beaten the S&P 500 by an average of 21.3 percentage points in their first month following debuting in trading. However, that average margin has narrowed to just 2.3 percentage points above the S&P 500, for the fifteen US IPOs conducted since the start of September.

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