NYSE Euronext sees encouraging IPO market in 2010

SAO PAULO (Reuters) - NYSE Euronext Inc (NYX.N) sees encouraging signs for U.S. initial public offerings in 2010 as investors venture back into equities, top executives at the parent of the New York Stock Exchange said on Monday.

The company expects the number of IPOs to rise to 20 or more by the end of this year from the 15 so far in 2009 and sees continued demand for new offerings next year, said Scott Cutler, its head of listings.

"We expect to see late in 2009 and into 2010 the start of a new cycle in capital raising," Cutler said at a news conference in Sao Paulo, Brazil's largest city and financial hub. "I'm encouraged by the type of backlog that we see developing in the filing activity."

The company did not say how many new listings it expected in 2010.

NYSE Euronext Chief Executive Officer Duncan Niederauer said it was better to have fewer IPOs as the rebound in U.S. stock markets gains traction.

"The financial services industry has been very smart not to rush too many companies to market because I think the last thing the market needs right now is an oversupply of mediocre deals," Niederauer said. "We'd rather have a small quantity of very high-quality deals."

The rally in U.S. and global stocks since April "is real," he said, but a more consistent recovery will depend on signs that major economies are expanding and on greater consumer confidence.

The S&P 500 .SPX has surged nearly 50 percent since reaching a 12-year low in early March, while the Dow Jones industrial average .DJI rose nearly 40 percent in that time.

"Now that we sit together here in late summer, we can feel a lot more confident than I did in April," Niederauer said. "The market has held onto that rally."

NYSE Euronext shares closed the day 5.2 percent weaker at $27.11. U.S. stocks were lower overall on concerns about the global economy.

The U.S. IPO market has picked up steam since February, when Mead Johnson Nutrition Co (MJN.N) launched an $828 million IPO, though dollar proceeds are down 85 percent from where they were a year ago, according to Thomson Reuters data.

So far in 2009, a total of 18 U.S. corporate IPOs, which exclude those by real estate investment trusts and blank check companies, have raised $4.5 billion.

Of those, 11 have listed on the Big Board, raising $3.3 billion, while seven have raised $1.2 billion and listed on rival exchange operator Nasdaq OMX Group's (NDAQ.O) U.S. stock market.

NYSE also listed the IPO by Barry Sternlicht's Starwood Property Trust Inc (STWD.N) REIT, whose total proceeds rose to $951.5 million after underwriters bought additional shares on Monday, making it the year's largest U.S. IPO.

Some of the NYSE-listed IPOs this year include those of language training software maker Rosetta Stone Inc (RST.N), while Nasdaq has listed the IPOs of online restaurant reservations system OpenTable Inc (OPEN.O) and chipmaker Avago Technologies Ltd (AVGO.O), among others.

Meanwhile, Niederauer said high-frequency trading had been swept up in the discussion over flash trades, which exchanges send to specific groups of market participants before routing the orders to the wider market. High-frequency trading increases market liquidity and should be encouraged, he said.

"High-frequency trading really is the market making of the 21st century," he added. "High-frequency trading, from our point of view, is the most consistent market participant constituent in terms of liquidity provision, and I actually think it should be encouraged and not discouraged."

(Reporting by Elzio Barreto; Additional reporting by Phil Wahba in New York; Editing by Gerald E. McCormick, Lisa Von Ahn and Richard Chang)