(Bloomberg) -- Barclays Plc is seeing signs that the yearslong drought in IPOs is slowly coming to an end as corporate chiefs and investors alike have gotten more clarity on central banks’ plans to lower interest rates. 

The British bank — which recently helped CVC Capital Partners Plc raise €2.3 billion in Europe’s third-biggest initial public offering this year —  sees “more to come” from clients looking to do such deals, said Tom Swerling, who leads the stock underwriting business globally at Barclays.

“We are coming off a low-volume environment because the market was still concerned about interest rate visibility,” Swerling said in an interview. “But with more conviction on that both in Europe and in the US, investors are increasingly looking at IPOs as a source of alpha.”

Corporates chiefs across Europe are slowly tapping equity capital markets again, with companies on the continent raising $12.4 billion by IPOs this year, more than double the amount in the same period last year. Globally, though, IPO volume is still down over that time. 

In the US, investors have spent much of the year furiously debating when the Federal Reserve will cut rates and by how much after inflation has proven to be much stickier than almost anyone predicted at the start of the year. 

The ongoing uncertainty has stymied dealmaking and underwriting, crimping revenue at Wall Street’s biggest banks. But Fed officials earlier this month coalesced around a desire to hold interest rates higher for longer, giving some bank executives hope that the additional clarity might bring a long-awaited rebound in activity.

European Central Bank President Christine Lagarde, meanwhile, recently indicated that an interest-rate cut is probable next month with the rapid gain in consumer-price growth now largely contained in the region.

“We are at the early stages of capital inflows into Europe,” Swerling said. “Investors are looking at policy divergence between the US and Europe with respect to rates as a potential entry point.”

Barclays, for its part, is expected to post about £80 million in equity underwriting revenue in the second quarter, according to analyst estimates compiled by Bloomberg. That would be a 15% increase from a year earlier and more than double the £37 million in revenue the business generated in 2022. 

The bank recently served as joint global coordinator on National Grid Plc’s push to raise £6.8 billion, the UK’s biggest equity deal in more than a decade. The firm also was appointed joint bookrunner on Alibaba Group Holding Ltd.’s plans to raise $4.5 billion from a convertible bond sale, which was the largest such offering globally in over 15 years. 

Swerling said the flurry of investors looking to make a bet on artificial intelligence in some way should also support underwriting activity in the coming months. Already, companies involved in the semiconductor ecosystem, data centers and energy supply are looking to capital markets for help as they expand to meet growing demand for the technology as well as the AI firms themselves.

“These companies have ambitious plans,” Swerling said. “There is more to come in terms of equity raising. We see a good amount across the entirety of that industrial chain.”

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