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FROM DROUGHT TO DELUGE: UBS PREDICTS RECORD US EQUITY ISSUANCE

U.S. equity issuance is set to hit record highs in absolute dollar terms this year, with both IPOs and secondary offerings picking up after a post-2021 drought, UBS Global Wealth Management said in a note dated June 17.

UBS expects U.S. IPO proceeds to reach $200 billion to $350 billion in 2026, which would mark the largest dollar value of new listings on record. Secondary offerings from already-listed companies could also top $400 billion, another record, the brokerage said.

The surge, however, is unlikely to derail the broader equity market, UBS said, arguing that issuance should be viewed relative to the size of the overall market value of all publicly listed U.S. companies, which is at about $72 trillion.

"IPO activity tends to rise and fall with equity market performance—it is a coincident indicator. Greater issuance shouldn't be a headwind to further equity market gains," UBS strategists said.

Elon Musk's SpaceX kicked off the mega-IPO wave with a record-breaking IPO last week that valued it at roughly $1.8 trillion.

AI rivals Anthropic and OpenAI have also confidentially filed for U.S. listings that are expected later this year, setting the stage for one of the busiest periods for marquee offerings in recent memory.

UBS said issuance activity in 2026 is likely to be significantly higher than in recent years but still roughly in line with the long-term average as a share of market value, and below peaks seen in the 1990s and during the financial crisis.

The brokerage also said corporate buybacks should help offset the wave of issuance, with U.S. companies having repurchased $1.2 trillion of shares over the past 12 months. "So in aggregate, the corporate sector will likely buy back slightly more stock than it issues this year," UBS said.

Still, UBS cautioned that investors should watch the quality of companies coming to market, saying broader equity-market risks could rise if IPO activity becomes more dominated by lower-quality issuers.

(Kanchana Chakravarty)

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