As concerns of a debt crisis in Europe further escalated this week, the global equity market continued its steady decline with the MSCI World Index down 3% so far in May.
It's no surprise, then, that new issues encountered difficulties raising capital, as nervous investors refused to put money to work in these new and untested equities. The result: $5 billion in IPOs postponed or withdrawn globally since Tuesday.
Tuesday: Chinese shipbuilding company New Century Shipbuilding postponed its Singapore listing on Tuesday after complaints that the firm failed to disclose legal disputes with a customer. The company had originally planned to raise as much as US$1.7 billion in what would have been Singapore's largest ever offering before cutting the deal size more than half to $610 million, and ultimately pulling it altogether.
Wednesday: Cerberus-backed German real estate company GSW Immobilien withdrew its Frankfurt offering on Wednesday citing market conditions. The company was looking to raise $630 million in what would have been Germany's fifth IPO this year.
Thursday: The biggest blow came on Thursday when China-based real estate company Swire Properties (962.HK) canceled its $3 billion Hong Kong IPO. A company press release cited "a deterioration in market conditions" since the publication of its prospectus last week as the main reason for the postponement. Concerns of a bubble in the Asian real estate market may have also put pressure on the offering, and recent Hong Kong real estate IPOs Evergrande Real Estate (3333.HK) and Fantasia Holdings (1777.HK), among others, have generated negative returns YTD.
Also of note were the postponements of two U.S. offerings on Thursday: REIT Americold Realty Trust (ACRE) and dental services provider Smile Brands Group (GRIN), which were set to raise $600 million and $125 million, respectively.
Despite this week's hiccup, the calendar remains active with more than 20 deals set to price across the globe in the coming weeks.
