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BofA (BAC) to Take Advantage of the European IPO Market Revival

Given that Europe’s initial-public offering (IPO) market has been recovering after almost two years of weak trading activities, Bank of America Corporation BAC seeks to build out its equity capital markets franchise in the region. The news was first reported by Bloomberg.

James Palmer, BofA’s head of equity capital markets in Europe, the Middle East and Africa, said in an interview that last year, the bank made a “conscious decision” to focus particularly on stake sales by large shareholders.

Palmer stated, “It’s not just the large blocks — we have also spent time cultivating relationships to win sole roles on smaller blocks in the sub-$300 million category, which frankly was an area we needed to improve in.”

Notably, as new highs for stocks and the likelihood of interest rate cuts raised hopes for a sustained recovery in listings and a brighter economic outlook, the European IPO market made its strongest start at the beginning of this year since the pandemic.

The revival in the IPO market also came as pressure started to build on private equity funds to return cash to their funders amid higher interest rates.

In the last couple of months, stock listings by some of the big names in Europe, such as Puig Brands SA, CVC Capital Partners Plc and Galderma, have helped investors make a lot of money and have driven a fourfold increase in IPO volumes.

Thus, amid Europe’s IPO wins, BofA is looking to position itself for growth in the region.

Palmer stated that it is “about investing in our teams for the long run. We want to be well positioned for when the equity capital markets come back in full force next year.”

Currently, BAC has an 8% share of the market for equity offerings across the EMEA.

Over the past six months, BAC shares have gained 33.8% compared with the industry’s 29.3% rally.


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Zacks Investment Research

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Currently, BofA carries a Zacks Rank #3 (Hold).

A couple of better-ranked stocks from the finance space are T. Rowe Price Group, Inc. TROW and Artisan Partners Asset Management Inc. APAM.

Earnings estimates for TROW have been revised 13.5% upward for the current year over the past 60 days. The company’s share price has increased 20.3% over the past six months. TROW currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Artisan Partners presently carries a Zacks Rank #2 (Buy). Its earnings estimates have been revised upward by 3% for the current year over the past 60 days. In the last six months, APAM’s share price increased 23.7%.

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