NEW YORK, April 5, 2016 /PRNewswire/ -- On April 1, 2016, the boutique firm, Triad Securities Corp., released a third party custom research report entitled "1Q16 Syndicate Summary and Outlook" that details the current state of the syndicate market and the outlook for the remaining three-quarters of 2016.
In the year's first quarter, the paths for initial public offerings (IPOs) and secondaries diverged, and the issuance of IPOs nearly vanished as volatility increased. Meanwhile, there was an increase of secondary issuance.
"Overall, only 11 companies came public in the first quarter (including blank check and closed-end funds), down 69% from 4Q15 and down 71% year over year," the report stated. "For secondaries, 100 companies raised capital in 1Q16, down 54% year over year but up almost 100% quarter over quarter."
In 1Q16, the United States equity market experienced high volatility, which, according to the report, was caused by concerns over growth in China, a drop in oil prices, and feelings of uncertainty that grew as Federal Reserve rates continued to climb at the end of fourth quarter 2015.
The report notes that at the end of the 1st quarter stocks recovered their lost value at a rate of 10% to 15%. The secondary issuance trend that occurred in March may be a reflection of investor optimism as secondaries were brought out at twice the pace of the preceding month.
"Based on the recovery of stock prices and the price-per-barrel of West Texas Intermediate crude, falling volatility, and recent news that the Federal Reserve will most likely not be aggressively raising rates in 2016, investors are beginning to once again consider a risk-on mentality," the report states.
Ultimately, this may be a positive indicator for IPOs into the next quarter.
The "1Q16 Syndicate Summary and Outlook" report can be found at the Triad Securities website at triadsecurities.com.
About Triad Securities Corp.
Triad Securities Corp. is a prime brokerage services firm offering superior and individualized prime broker services to professional traders and hedge funds. They offer direct access to algorithms, brokers, and exchanges. To learn more about their state-of-the-art technology and competitive transaction charges, visit http://www.triadsecurities.com.
Scott Daspin, Director, Prime Brokerage Sales
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SOURCE Triad Securities Corp.