A sudden increase in market volatility in the past month has prompted many companies to put off IPO plans, prompting a slowdown from a fast-paced IPO market in September, according to media reports.
At least 14 firms have delayed IPOs in North America alone since late September, according to a tally from the Financial Times. Several deals have also priced below expectations in the past month or so and companies expect more volatility amid the upcoming earnings season and new economic data, the newspaper says.
Market turbulence increased in October as the US Federal Reserve prepared to end its latest round of the quantitative easing stimulus plan that has helped firm up stock markets worldwide since shortly after the financial crash of 2008.
At the same time, economic data from China, Germany and elsewhere has prompted a resurgence of fear of a global economic slowdown. The worst-ever outbreak of Ebola in West Africa and a series of conflicts including gains by Islamic militants in Iraq and Syria and the simmering conflict in Ukraine have further heightened uncertainty among investors.
Bankers say they are now facing increasing difficulty in pitching deals, the FT reports, even after a rebound in the S&P 500 and other indexes in mid-October that followed weeks of decline. The reticence marks a sharp turnaround from the third quarter, when Alibaba carried out its $25 bn listing and proceeds raised more than tripled to $38.1 bn from $11.8 bn in the same quarter last year, according to data from PwC.
Still, 311 IPOs have been priced globally so far this year, representing a 44 percent increase on the same period last year, IPO research firm Renaissance Capital says. Total proceeds raised, meanwhile, increased 66 percent to $164 bn. Almost 42 percent of the proceeds were raised in North America while 32 percent came from Europe and 24 percent from Asia-Pacific.
