Withdrawn 2008 IPOs total more than funds raised

By Daisy Ku

LONDON, Feb 29 (Reuters) - The global credit crisis has forced IPO hopefuls to shelve flotations totalling $21.4 billion so far this year, almost double the value of new equity issuance, Thomson Financial data showed.

A total of 61 global initial public offerings (IPO) were put in ice in the first two months as few deals were moving from the pipeline into volatile markets.

A total of 92 issuers raised just $12.2 billion in IPOs, the lowest level since 2003.

"The IPO market is currently difficult, as people are clearly risk-adverse," said Henrik Gobel, managing director of global capital markets at Morgan Stanley.

"It means that to list new companies you may have to accept valuations which in many cases the issuers do not find attractive. And therefore, in many cases they don't move forward," he added.

Due to the prolonged market turmoil, IPO hopeful Russian investment bank KIT Finance, for example, is meeting investors in London and Hong Kong to explore alternative fundraising options, such as private placement and euro bond issuance.

Saudi-owned Aujan Industries Co. has delayed its $200 million offering to towards the end of 2008 because of volatile markets.

Earlier this month, Russian silicon producer Nitol Solar said it was forced to shelve its $300 million London listing plan due to unfavourable market conditions. The Danish government called off the $3 billion share sale plan of Dong Energy last month.

"We are not putting money in IPOs. They simply don't offer good value," said a London-based fund manager.

CASH

Over 40 percent of fund mangers said they have been increasing cash weighting. Cash levels rose sharply in February to average 4.7 percent, up from 3.9 percent in January, a Merrill Lynch global fund manager survey revealed.

"We don't expect the IPO market to revive before Easter," said a London-based equity capital market banker focusing on European deals.

Total global equity capital markets issuance value was just $16.7 billion from 120 issues, the lowest monthly level since January 2003, Thomson Financial data showed.

But volume is picking up, not least in secondary issuance, as financial institutions race to shore up their capital bases.