Arm listing could signal a return to IPOs

In documents filed on Monday, Arm said it planned to list on the Nasdaq, seven years after quitting London's stock exchange after being bought by Japan's SoftBank

The initial public offering (IPO) of British chip designing giant Arm, announced on Monday, could signal a rebound in firms introducing their shares on stock markets after a year of comparatively few such listings.

Arm is a world leader in designing chips that are used in smartphones across the world and aims to be a major player in artificial intelligence (AI).

In documents filed on Monday, Arm said it planned to list on the Nasdaq, seven years after quitting London's stock exchange after being bought by Japan's SoftBank.

The partial listing for an as yet undetermined number of shares could occur as soon as next month, as per financial media, possibly raising around $10 billion for SoftBank and valuing Arm at over $60 billion.

That would be the biggest listing on the tech-oriented Nasdaq since electric vehicle manufacturer Rivian went public in 2021 with a market value of $68 billion.

Arm’s initial public offering "is going to have ramifications across global tech," Dan Ives, senior equity research analyst for the technology sector at Wedbush Securities, told AFP.

It speaks to more of a risk appetite toward growth equities after what has been a very choppy few years in the market, Ives said.

The IPO market is very sensitive to the sentiment of investors for taking on risk, and the market has been running hot and cold since the pandemic led to a halt in operations.

Central bank easy money policies prompted a steep bounce back in IPOs in 2021 with $450 billion raised in around 2,400 listings across the world, as per a study by consulting firm EY.

This was brought to a quick end last year as increasing interest rates and the Russian invasion of Ukraine caused havoc on markets and reduced risk sentiment. The amount raised dipped 45 percent and the number of listings slumped by more than 60 percent.