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IPOs reach new low

New offerings on the public market of Europe have suck to record depths following the loss of confidence in capital markets across the world.

PricewaterhouseCoopers, in its latest IPO Watch Europe Survey, has revealed the total value of IPOs on European bourses in Q3 2008 was €1.635bn, a tremendous drop from the €12.624bn raised in Q3 last year.

The largest new issue of the quarter was the Commercial Bank of Qatar which raised €444m – during the same period last year, EQT-owned diesel engine maker Tognum raised €1.8bn for its IPO.

The third quarter of the year has also seen just 69 IPOs where 183 were registered in Q3 2007, and the average amount raised dropped from €80m to €33m. Even compared to Q2 of this year, it’s been a dramatic fall – 133 listings with an average size of €82m.

Richard Weaver, partner in the capital markets group at PricewaterhouseCoopers, said: “Even by the standards of what is traditionally a very quiet period, IPO market activity over the last three months has been highly subdued. All European markets have been adversely affected by the volatility in the financial markets, with money raised representing only one sixth of that raised in the same quarter of 2007. Despite the global financial crisis and overall unfavourable climate, the top five IPOs of the quarter are dominated by banks and investment companies.”

The outlook is similarly gloomy. Tom Troubridge, head of the capital markets group, added: “Market conditions are likely to remain depressed until well into next year as investors remain wary of the highly uncertain financial environment. Many companies that might be considering a float are remaining on the sidelines as they await more positive signs of recovery in the equity markets. The earliest we are likely to see the IPO market reopening is in the second quarter of 2009.”