IPOs in Asia cool down

Posted Jul 14th 2008 12:00PM by Tom Taulli
Filed under: China, Initial Public Offerings

For 2008, the U.S. IPO market has been fairly bleak, but it is not alone. Things are tough in Asia, too. In fact, according to a report from the Wall Street Journal [a paid publication], about $20 billion in IPOs have been shelved.

The reasons are well-known: a fall-off in equity values; the credit crunch; high oil prices; and a global slowdown in economic growth.

Actually, even if things improve for the second half of 2008, there could still be problems. Why? Well, because there is a large backlog of filings.

All in all, this is serious stuff, especially for China. The country's policy is to maintain a strong economic growth rate. But if companies have difficulties raising equity capital, there is likely to be a drag on GDP.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Tags: asia, china, IPOs