E&Y: Recession fears slash IPOs
Date: 16-04-2008
Source: ET Net News
A record number of firms canceled initial public offerings in the 1st quarter as stock markets fell and concerns about a US recession sapped demand for new shares, a survey by Ernst & Young said.
As many as 83 companies withdrew IPOs while a further 24 delayed share sales, the survey showed yesterday.
The number of firms going public fell 60% from the 4th quarter of 2007 and was down 38% from the first 3 months of last year.
"There isn't likely to be much change before the last quarter and that's probably an optimistic prognosis," Ernest & Young IPO Leader David Wilkinson said. "We're looking toward 2009 for when confidence might start returning."
The MSCI World Index has slipped 13% since reaching a record in October. Apax pulled its planned US$2.5 billion (HK$19.5 billion) IPO of fashion brand Tommy Hilfiger in January, citing "market conditions."
German state-owned HSH Nordbank said last month it will postpone a planned IPO, saying the market environment had worsened.
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