With earnings season coming to a close and a strong October rally in equities, investors and corporates alike remained fixated on the path of inflation, which showed signs of easing on November 10th. The CPI rose 7.7% in October y/y, vs 7.9% expected and down from the 8.2% rise in September y/y. The market reacted positively, returning 5.5% on the day of the print, presenting issuers with a welcoming window to sell stock in November ahead of the Thanksgiving holiday.

 

While healthcare remained the top sector for equity issuance month over month, the offering volume in November was more broad based as we saw notable representation across a number of other sectors for the first time in a few months. Over $400m of capital was raised by companies in each of the tech, industrials, financial services, and energy sectors, while over $1bn was raised in healthcare, consumer, and real estate.

 

On the IPO front, issuance was anemic with the second lowest issuance volume this year. Notable deals included Acrivon Therepeautics (ACRV), a clinical stage biopharmaceutical company, which went public on 11/15, pricing at $12.50 and raising $94.4m. The deal was postponed a week and initially had a target range of $16-$18. Shares climbed 33.1% in their first day of trading before retreating back to the IPO price to end the month. The other notable IPO this month was an ADR for Chinese midscale hotel chain Atour Lifestyle Holdings (ATAT). The deal priced at $11 (range was $11-$13) and raised $52.3m.

 

Follow-on issuance was relatively healthier with 55 deals totaling $9.9bn of equity capital in November, the strongest month for issuance since the mid-summer rally sparked a flurry of deals in early August. The average discount on deals >$50m was 7.7%, with first day performance averaging a 2.7% gain. The largest deal was a $1.6bn registered block trade of AmerisourceBergen (ABC) which priced at a 4.2% discount on 11/7 and traded up 2.9% day one.  

 

Throughout the month, there were no notable additions or subtractions to the US IPO pipeline. While ECM momentum continues in other geographies like the Middle East, we do not expect any more major US listings until the new year.

 

We see a similar setup heading into December as we saw in November, with strong market momentum giving way to a two-week window for potential ECM activity before key macro announcements and another week before the year-end holidays.