Initial public offerings in 2012 slumped to the lowest level since the financial crisis as signs of an economic slowdown and Facebook Inc.’s (FB) disappointing debut curbed demand and prompted companies to push back sales.
IPOs have raised $112bn worldwide this year, the least since 2008, according to data compiled by Bloomberg. Initial sales in western Europe dropped to one-third of last year’s level, while concern about China’s economy helped cut proceeds in Asia by almost half. U.S. offerings raised $41 billion, little changed from last year, as Facebook’s IPO spurred a monthlong drought in U.S. deals.
With the possibility of $600bn in U.S. spending cuts and tax increases that could cause another recession also weighing on the IPO market this year, the global backlog of potential offerings has now swelled to the largest year-end size since 2007, data compiled by Bloomberg and Ipreo show. That could set the stage for a rebound if lawmakers avert the so-called fiscal cliff, according to Credit Suisse Group AG and Barclays Plc, with companies from China Petrochemical Corp. to ING Groep NV poised to potentially move ahead with offerings.
'A lot of people have been very selective', Joe Castle, head of equities syndicate at Barclays, said at a briefing this month in New York. 'If we see some deals go out early in the year that go well and trade well, then it feeds on itself for more volume to come out in the U.S. and on a global basis'.
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image: © West McGowan