NYSE President Tom Farley weighed in on the market impact of Brexit and the impact of volatility on the IPO market and investors.
Farley recounted what it was like on the floor of the exchange the morning after the Brexit decision.
“We planned for both the leave eventuality in the referendum vote as well as the remain. My personal prediction was it’s going to be remain. That next morning, it was intense. You could just sense there was a lot anxiety and angst. And to some extent the world does look to the New York Stock Exchange, particularly in a volatile moment like that,” Farley told the FOX Business Network’s Maria Bartiromo.
But despite the initial anxiety the markets have made positive strides in the week since the vote according to Farley.
“The markets have recovered to a great extent. In fact some indices are all the way back to where they were pre-Brexit. In addition, volatility has subsided dramatically this week. So those are both very good things.”
Periods of volatility over the last year have taken a toll on the IPO market according to Farley.
“IPOs as you know are inversely correlated to the volatility in the market,” and, Farley continued, “We keep having these bouts of volatility.
Farley said this volatility is keeping investors away from IPOs.
“Investors don’t like to invest in IPOs during a very turbulent time.”
Farley sees global uncertainties as driving investors to U.S. markets.
“A silver lining, at least from the perspective of the NYSE is when other areas of the world are having a tough time or there is a lot of uncertainty, the U.S. and the NYSE are safe havens. So we do get more global IPOs.”
Farley explained that data services become a growth business for exchanges such as the NYSE.
“We have the data so we’re finding new and valuable ways to deliver data to customers in a form they can digest it and make more informed decisions.”