The stock market rally over the past two months has brought with it a renewed interest from private companies to get in on the action.
Initial public offerings have surged this year, with 16 deals brought to market, six of which will have priced by the end of January. No IPOs priced in the month last year. Adding in four follow-ons (additional share offerings after an IPO), that brings to 20 the total of U.S. equity capital market deals in 2017, more than double the nine that had come to market during the same period last year, according to market analytics firm Dealogic.
The trend comes as stock market volatility has decreased dramatically from early 2016, when stock averages nearly hit bear market territory. The CBOE Volatility Index, which gauges market fear, is about half its long-term average, while the Dow industrials are riding a nearly 10 percent postelection rally.
IPOs also are benefiting from pent-up demand off a slow year during which companies preferred to eschew going public due to a hefty amount of private equity cash floating around.
"Companies feel a little more confident that investors are looking for ideas and there's a more captive market," said Art Hogan, chief market strategist at Wunderlich Securities. "It feels like you've got a receptive marketplace for it. Plenty of companies have been waiting long enough."