Firms feel the chill as equity markets freeze

A near shutdown in global equity capital markets is forcing issuers to wait, possibly delaying to next year much-anticipated offerings such as the US government's shares in bailed-out companies. With the debt crisis still raging in Europe and the US economy struggling to recover, many issuers are preferring to wait - if they can - for markets to calm down, bankers said.
---- Q3 equity fundraising down 48pc at $99.5bn vs Q3 2010
---- Goldman Sachs retains equity league table crown in Q3
---- Treasury sales of GM, AIG, Ally could be delayed -sources
---- Eurozone jitters spread, hit share sales in US, Asia
"Right now, if you've got premier assets and you have the ability to wait, most will," said Dan Cummings, global head of equity and equity-linked capital markets at Bank of America Merrill Lynch. If the markets don't improve, for example, the US Treasury may not try to sell down its stakes this year in General Motors Co, American International Group Inc , and Ally Financial, several sources familiar with the situation said.
A delay in selling off these shares, which were acquired through unpopular bailouts during the financial crisis, could create problems for the administration, especially as the US election approaches next year. The sources cautioned that no final decisions had been made, and the US Treasury declined comment.
The tough markets are hurting scores of companies around the world. In fact, equity fundraising world-wide slumped to its slowest since early 2009 in the third quarter, Thomson Reuters data shows. Year-to-date, IPOs world-wide are down 7 percent.
A total of $99.5 billion was raised in global equity capital markets in the third quarter, 48 percent less than was raised in the same period last year, according to data through September 28. Mergers and acquisitions activity was also down in the third quarter.
Goldman Sachs, which topped equity capital markets league tables at the end of the first half of the year, kept its crown in the third quarter. In Europe, which has not seen a big IPO since Spanish savings banks Bankia and Banca Civica raised a combined 3.7 billion euros ($5 billion) in July, several multibillion-euro deals slated for September and the fourth quarter have been pushed back to next year.
Bankers said offerings by firms such as German chemicals maker Evonik and Siemens's lighting unit Osram had been considered bellwether deals, and their decision to postpone made it less likely others would test the waters unless markets improved significantly.
Spain's state lottery, which had been expected to be a rare success story thanks to its strong, defensive profits and high, monthly dividends, pulled its 7 billion euro IPO on Thursday due to tough markets and political opposition. Asia is feeling the effects, too.
Hong Kong, the world's biggest IPO market for the last two years, saw some $4.5 billion worth of deals pulled just last week by companies including Sany Heavy Industry and rival XCMG Construction Machinery Co Ltd. Citic Securities , Sinohydro Group and Great Wall Motor , which moved ahead with offerings, have either priced weakly or struggled in the aftermarket.
Still, bankers are hanging on to some hope. The two biggest tech IPOs currently in the US pipeline are daily deals site Groupon and gamemaker Zynga. "There are clearly a number of issuers who have opted to just look at 2012," Bunzel said. "But there are transactions we could see."