NYSE Vice Chair John Tuttle spoke to Euronews’ Angela Barnes about why European companies are opting for US stock exchanges and how the upcoming US elections will impact the IPO market.
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00:00 I wish I had a crystal ball. We've been around for 231 years on the New York Stock Exchange.
00:04 The United States is the deepest pool of liquidity and capital in the world. Capital costs capital.
00:09 Welcome to The Big Question, the series from Euronews where we speak to some of the most
00:21 influential people in the world of business. Well, we're here in Davos at the World Economic Forum
00:27 and joined by the New York Stock Exchange Vice Chair John Tuttle. John, your 16th consecutive
00:33 year here in Davos. How have you seen it evolve over those 16 years that you've attended?
00:39 Well, it's evolved quite a bit. I would say that the themes have continued to evolve. Now more
00:43 focused on technology, less on global affairs, which is still important, but more focused on tech
00:49 and employment and the future of work, which is, I think, refreshing for a lot of businesses to
00:54 talk about and learn from one another, the leaders that are here. But also, you know, I will say one
00:59 thing that hasn't changed is that oftentimes this place can be a contra indicator for what's actually
01:04 going to happen in the world. So too many years that I've been here, I've heard the mood be poor
01:08 and depressing and the markets perform well. I hear there are years where there's euphoria
01:13 around the markets and they don't perform as well. So that's a trend that I suspect will continue to
01:17 some degree. That's really interesting you say that, John. And of course, this Davos is taking
01:22 place against a backdrop of crisis, the economic global slowdown as well, and the conflict in the
01:28 Middle East, the disruptions in the Red Sea as well, and among many other things, the development
01:33 of AI. What's the sentiment among business leaders and economists here that you've spoken to and the
01:39 panels you've been in on? You know, the sentiment is a little different than past years. And I say
01:44 it's muted in the sense that people aren't advocating in one camp or the other. They're
01:48 here to learn. And you have a lot of experts here, everybody from Microsoft and Sam Altman to a lot
01:53 of companies and academics that are here. So this has really become a forum this year where I feel
01:57 like people have their mouths closed and their ears open a bit more. Okay, interesting. And talking
02:02 about that, has anyone been talking about the Bitcoin ETFs and the decision by the US regulators
02:08 to give 11 Bitcoin ETFs the green light because it was a contentious matter, wasn't it? But it was a
02:15 major win for Wall Street. What's your view on that, John? It's come up quite a bit here as well.
02:19 And frankly, this is a project we've been working on for the better part of a decade with some of
02:23 our partners and obviously working closely with the regulators. And our view is that, look, the
02:28 more products we can make available to the marketplace that provide the protections and
02:32 liquidity of the public markets, that's a good thing and will allow investors to decide whether
02:36 they want to be part of that or not. But we're proud to have played our part in bringing more
02:40 access to more opportunity for more people in the markets. And this is a big win for obviously those
02:44 in the Bitcoin community as well. And John, let's move on to talk about as well the relationship
02:54 with the foreign exchanges like the CAC 40 in France, Germany's DAX, FTSE 100 in London.
03:00 We've seen in 2023, last year, many big European companies move over to US stock exchanges,
03:08 opting to list their instead IPO there. What has been the big attraction with US indexes to move
03:13 them away from their home turf? Well, first of all, the New York Stock Exchange has long been
03:17 a global exchange. We have 2400 companies from over 47 different countries on the NYSE. So
03:23 companies are moving over from Europe and other parts of the world, including South Africa and
03:28 parts of Southeast Asia to bring their primary listing to the United States. And they're doing
03:32 it because no matter how you look at the data, the United States is the deepest pool of liquidity and
03:37 capital in the world. It has the broadest investor base. It has a lot of analysts and investors that
03:42 are focused on growth, not just dividends and value. And also a lot of the global peers for
03:48 these companies are listed here. And by moving to the United States, becoming a primary listing in
03:53 the United States or even domiciled in the United States, these companies are eligible to be
03:57 included in many indices as well that they would not be if they were continued to be based outside
04:02 or listed outside the United States. That brings them more capital, a more stable shareholder base
04:06 and ultimately can help increase their valuation as well. So we've seen a lot of momentum,
04:11 particularly over the past two years, and it continues to accelerate into 2024.
04:14 And with that momentum, John, which markets, which companies are you particularly watching in 2024
04:21 that you found particularly interesting and you're watching their growth? Is there anyone we should
04:25 be watching? Well, I won't talk about any specific companies you can imagine for a whole host of
04:28 reasons. Of course, of course. But there are a lot of exciting companies looking to come to market.
04:32 A lot of them have stayed private for a long time and they see now that the time is right for them
04:36 to come to the public markets, to raise capital, to include public investors in their journey.
04:41 And when they're ready to come to market, we'll be ready to welcome them.
04:44 You'll be ready to welcome them. And John, as well, you work with private companies looking
04:48 to go public. Can you just talk us through the process and a couple of
04:52 challenges perhaps at the moment for those companies with coming to IPO,
04:56 listing on the stock exchanges at the moment globally? What do they have to consider and
05:00 what advice are you giving them? Right. So, you know, there have been some macroeconomic
05:04 headwinds, but that creates the perfect opportunity for us to be a partner to these companies
05:08 as well. And many people aren't aware that we actually operate over a dozen exchanges worldwide.
05:12 We're one of the largest market data providers in the world. And so we've become these companies'
05:16 first call, not only as they think about the public markets, as they think about debt,
05:19 as they think about managing market risk as well and just preparing themselves to be
05:23 better companies. So sharing insights on everything from ESG and governance to how
05:28 they should be thinking about structuring their business as they become a public company.
05:32 We've really become an even more important partner to them in the process
05:36 as they prepare to go public.
05:37 US elections are in November. And do you think they will influence the timing of companies
05:51 coming to the market? Yeah, I would say two things. First of all, we've been around for
05:54 231 years on the New York Stock Exchange. There have been world wars, there have been
05:57 natural disasters, there have been elections. But when you pull the lens back, the markets
06:02 always been open and the chart goes from the bottom left to the upper right. So I'm optimistic
06:05 no matter what the outcome is. But with regard specifically to IPO activity and new equity
06:10 issuance, interestingly enough, you hear a lot of rhetoric, even here around Davos, that in an
06:14 election year, we expect a quieter marketplace. I don't buy into that. I actually think those
06:19 IPO windows may narrow a bit. But I think, you know, high quality companies can come to market
06:24 when they're ready. And we have a lot of high quality companies lined up to come in 2024.
06:29 Okay, brilliant. I've just got one more question for you, John. Obviously, you know, we're
06:33 economists, investors, stockbrokers, we're all following very closely the monetary policy path
06:38 of the Federal Reserve and what interest rates are going to do and the impact of inflation and
06:43 commodity markets, etc. What's your prediction for the markets for 2024? Your forecast? Or what's
06:49 your thoughts? Do you think we're going to see a soft landing as they're saying here in Davos
06:53 this week? Well, you know, it's I wish I had a crystal ball. But look, you know, what happened
06:58 over the past couple of years with the Fed and other central banks around the world increasing
07:02 interest rates meant that money was not free anymore for companies and capital costs capital.
07:07 So it forced companies become much more disciplined from a financial and an operating standpoint,
07:11 which better position them for 2024 and beyond. So the state of the consumer remains strong,
07:16 at least in the United States and other parts of the world. Businesses have become more resilient,
07:20 as I said, from an operational financial perspective, and even a governance perspective
07:24 as well. So as you can imagine, I'm an optimist. Brilliant. John Tuttle, thank you ever so much
07:29 for joining us on The Big Question. Absolute pleasure to have you on the show. Great to be
07:33 here. Thank you. Thank you.
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