Market Conditions

Abstract

Asking investment banks about current and forecast market conditions makes sense. Not so much for the individual responses they each will provide, but more for the issuer to consider these in aggregate, so as to obtain a general view of where most firms believe the market is headed, beyond simply commenting about a bull or bear market. However, it should be remembered that prospective lead banks are necessarily in marketing mode at this stage. Hence, market conditions will often be painted as a window of opportunity that may soon be closing, so as to encourage the issuer to mandate lead banks at the earliest opportunity. Encouraging issuers to make active preparations for the IPO while keeping market conditions under review is often the main message communicated by the various firms in their pitches. Nevertheless, companies as well as their shareholders and advisers can still glean valuable information when asking the right questions.