Initial public offerings dropped last quarter to the second-lowest level since the financial crisis, as signs of a global economic slowdown threaten to extend the IPO market’s slump into 2013.
Initial share sales raised about $21.3 billion worldwide in the three months through September, 48 percent less than the previous quarter, according to data compiled by Bloomberg. While Japan Airlines Co. completed 2012’s biggest IPO since Facebook Inc., companies from guitar maker Fender Musical Instruments Corp. to Hardee’s owner CKE Inc. shelved their offerings after failing to procure the price they wanted from investors.
Facebook extended its post-IPO drop to as much as 53 percent last quarter after pricing its shares more expensively relative to earnings than 99 percent of companies in the S&P 500, data compiled by Bloomberg show.
In western Europe, companies raised a total of $385 million last quarter, the lowest amount since the first quarter of 2009, according to data compiled by Bloomberg. Talanx AG, Germany’s third-biggest insurer, canceled plans for a 700 million-euro ($905 million) IPO last month citing an “excessive discount” offered by potential investors. It revived the sale days later after slashing the size by 29 percent to 500 million euros.
In Asian markets such as Hong Kong, a string of accounting missteps involving mainland Chinese companies that were listed in recent years has sapped IPO demand. Meanwhile, Chinese central banker Zhou Xiaochuan warned in a Sept. 19 newspaper article that downward pressure on the country’s economy is still “relatively large.”