ANOTHER TROUBLED MARKET
IPOs decline.
By Don Durfee

Now issuers are getting cold feet. Global IPO volume dropped off a ledge in the first quarter, falling from 591 deals to just 236. The amount of capital raised plunged 60 percent to US$41 billion. And that’s including Visa Inc.’s US$19 billion IPO in March.

“The credit crunch and volatile market conditions have inevitably led to a slowdown in global IPO activity,” says Gil Forer, global director of IPO initiatives at Ernst & Young.

Asian companies aren’t fleeing the market quite as fast as their American and European counterparts, however. Last year, Asian companies accounted for 49 percent of global IPO volume; last quarter that rose to 60 percent. Notable Asian deals last quarter included the initial public offerings of China Railway Construction and India’s Reliance Power.

If history is any guide, IPO issuances may have further to fall. In the second quarter of 2003 there were only 130 IPOs—that’s 45 percent fewer than there were last quarter.