Nasdaq OMX will have its strongest year for IPOs since 2007 with a total of 120 companies listing in 2013 thanks to economic recovery in the United States and rising interest rates, a senior official said on Wednesday. Bruce Aust, executive vice president at Nasdaq OMX, said investors were looking beyond bonds and corporate debt for returns.
"As rates go up, people are looking for alternative classes to invest in and that bodes well for equity markets," he told Reuters during a trip to Israel. "We saw a lot around the financial crisis where companies didn't think they would get the valuations they wanted to in an IPO so they took the M&A route.
"That has changed in the US This year is the strongest IPO market since 2007," Aust said. The Nasdaq said in September that 166 companies had gone public on US markets in the first nine months of 2013, compared with 109 for the same period in 2012. Of the 96 public offerings on Nasdaq so far in 2013, 40 have been in healthcare.
Aust said large private equity-backed companies were also looking to carry out IPOs, citing the announcement by Blackstone-owned hotel operator Hilton Worldwide that it planned a $1.25 billion listing. On Tuesday, online messaging service Twitter chose the rival New York Stock Exchange (NYSE) for its upcoming listing, dealing a blow to the tech-heavy Nasdaq, which bungled Facebook Inc's 2012 offering.
"We think the natural home for them is Nasdaq and we are disappointed but we wish them well in their IPO," Aust said. But he said Marriott International was moving to Nasdaq from NYSE this month and a total of $500 billion in market value has shifted to Nasdaq from NYSE in the past five years.
"We feel we are definitely getting some of the large global brands switching to Nasdaq," said Aust, citing Kraft Foods and Viacom. He said that as many as 10 Israeli companies are expected to list on Nasdaq in the next 18 months. There are 70 Israeli or Israel-related companies listed on the Nasdaq, the most for one country after the United States and China, which has 90. The most imminent Israeli listing will be do-it-yourself Internet site builder Wix, which expects to raise up to $100 million. "We will see a couple more before the end of this year," Aust said.