Capital Markets Year End Review

This week I had the pleasure of being interviewed by Amanda Drury and Bill Griffeth on CNBC’s Closing Bell program, on the current state of the IPO market, investment in China and the status of pending legislation in Washington designed to remove barriers for companies going public. In the spirit of the holiday season, I thought I would share with you a summary of the interview, as it touches on several of the Exchange’s priorities, especially the all important topic of job creation.

As I stated in the interview, despite the number of companies that withdrew their offerings in the face of recent volatility (66 companies according to a recent study by Renaissance Capital), NYSE Euronext is very pleased with what we have seen this year in the Capital Markets. Despite the global slowdown, we raised $33B in proceeds this year on almost 100 transactions, lead by a very strong showing in the Finance, Energy and Consumer sectors. This year saw the debut of many of the exciting companies of tomorrow, including Pandora, LinkedIn, and DemandMedia. Perhaps more importantly, we are very encouraged for the prospects of 2012: we currently have over 120 transactions in our pipeline, with approximately $30B expected to be raised. As we remain globally focused, we are very pleased to report that we were the leader in IPOs this year, followed by Hong Kong and Shenzhen.

Speaking of China, there has been much written of late regarding governance issues surrounding Chinese companies, and I feel there are a few points worth making. While the notion of transparency around their financials has been the big seller against China this year, we  remain very upbeat about the number and quality of Chinese companies in our pipeline, notably in the Technology, Internet and Media sectors. Many of these companies are not simply ‘me too’ companies, but solid businesses competing in big markets. I recently returned from a trip to China and I can say that there does appear to be a feeling against our perceived sentiment against Chinese investment in the U.S. This cannot be ignored and does account for some of the valuations and depressed prices this year. As this improves, we do expect more of their deals will come to market.

Finally, the interview concluded on a topic dear to my heart – legislation pending in Washington focused on making it easier for our entrepreneurs to find the capital they need to take their companies public and create jobs. I recently testified before the Senate Committee on Banking, Housing and Urban Affairs on our recommendations around some of these bills, and posted a few blogs on the NYSE’s participation in the IPO taskforce, which last October submitted a series of recommendations to the U.S. Treasury Department and Congress that we believe will help companies access the capital they need to generate jobs and expand their businesses globally. The importance of this topic cannot be overstated – most of a company’s growth – over 90% - occurs after they go public. We need to lend our support to legislation that will remove unnecessary barriers, and encourage companies to go public and create jobs.

If you’re interested, you can view my interview here. As always, please reach out to me on this topic, as I would welcome your feedback. Otherwise, please  accept my wishes for a very happy holiday season and a healthy, prosperous 2012!