The resurgence in the initial public offerings (IPO) market is a sign that investors are once again growing more optimistic despite flare-ups in the euro zone debt crisis, according to the CEO of the London Stock Exchange.
Xavier Rolet told CNBC that while the past week's events in Cyprus may indicate a reawakening of the euro zone crisis, investors were becoming more and more used to minor setbacks. "The market is getting used to bad news, to this macro political news," Rolet said, adding, "The Chinese economy creates a Cyprus every week. It's not a significant issue, other than messages."
Indeed, Rolet took an optimistic approach to the future of the EU and the euro. "We continue to believe that the euro will hold," he said. "Ultimately, it will strengthen, and more importantly, eventually the competitiveness issue, which is the core reason why the euro has been encountering all these issues, will be fixed, particularly thanks to German leadership.
"So, I think the medium- to long-term prognosis is a positive one."
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An improvement in the IPO market has been around for some time now, Rolet argues, and equities are becoming increasingly attractive."Performance has been outstanding," Rolet contends. "Most IPOs that have come to the market in the last six to nine months are up 15 to 20 percent in some cases. And it points to a significant factor, (which) is that investors today,by and large, are short the real economy."