Too Much Of A Good Thing? IPO Withdrawals Rally

The Asian IPO frenzy of recent weeks is starting to show the first signs of fatigue. Significantly, Posco Engineering and Construction has become the third South Korean candidate in the last two months to cancel its plans to go public on the local bourse, after it indefinitely scrapped its planned US$770mn-US$920mn IPO. This latest cancellation comes hot on the heels of a string of Asian listings which have been met with frosty receptions, largely due to their high valuations. It seems in the current climate the market is demanding big discounts. In light of this, further IPO postponements would not come as much of a surprise, particularly as those companies lining up to come to market have little reason to rush their offerings, given their healthy cash reserves.

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