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E & Y Finds IPO Activity Slowed Down Rapidly Amid Financial Disorder
As identified by the Ernst & Young Global IPO update, global Initial Public
Offering activity during the 1st quarter of 2008, decreased rapidly in wake of
the credit crunch, as well as sustained financial disorder. The number of
Initial Public Offerings decreased by approximately sixty percent during the
1st quarter of 2008 compared to the 4th quarter of 2007.
In the 1st quarter of 2008,
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approximately US$40.9 billion was raised by around 236 IPOs which was sixty
percent less compared to US$102.1 billion in the last quarter. Due to constant
instability, twenty four companies all over the world deferred their listings
and eighty three companies withdrew their Initial Public Offerings. Gil Forer,
the Global Director of IPO Initiatives at Ernst & Young said that the instable
market conditions and the credit crunch have caused a slow down in the global
Initial Public Offering activity.
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Gil Forer also said that the capital increased by Reliance Power Ltd, China
Railway Construction Corporation Ltd and Visa Inc., reflects that well
developed companies are capable of attracting the interest of investors. He
further added, "While the mature markets are experiencing a slowdown, the
emerging markets are still thriving and will continue to drive global IPO
activity, as long as they experience robust economic growth."
Three out of top ten Initial Public Offerings during 1st quarter of the year
2008, were Chinese; greatest number of the deals were produced by Australia,
then China, Japan, Canada, Poland and India. NYSE (New York Stock Exchange),
HKSE (Hong Kong Stock Exchange) and NASDAQ were top 3 exchanges during this
quarter. Materials companies, by number of listings, led with twenty-six
percent market share of Initial Public Offerings followed by financials and
industrials.
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