GE began its investor road show for the IPO of the unit, to be called
Set for the end of the month, the IPO of 15 per cent of Synchrony is expected to raise around
While the IPO could enjoy a positive initial reception given the strong demand for offerings this year and investors' eagerness to deploy cash in the market, its longer-term performance will likely be hitched to the strength of the belief in a consumer recovery.
"It's a good indicator and good investment based on people who believe the economy is going to continue to improve as it relates to the consumer," said
More than two-thirds of Synchrony's
Some of those retailers including
Still, they could eventually benefit from a strengthening recovery. A gauge of US consumer spending rose solidly in June, the
Synchrony's rivals in the private label card business include consumer banks such as
Synchrony's other revenue comes from financing for bigger ticket consumer purchases, such as electronics or jewelry, and for healthcare procedures.
IPOs have performed well initially this year, with stocks rising 22pc on average between the final offering price and the first day's close, said
"Risk appetite is quite high because the market is obviously very strong," Schuster said.
GE, which revealed details for Synchrony as it posted a 13pc rise in second-quarter profit, valued the rest of Synchrony at around
"It is the most shareholder-friendly execution," GE chief financial officer
The separation is critical to GE's plan to slim down its
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