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IPOs More than Halve on Weak Investor Confidence

This year has been a particularly lean one for companies raising money by listing on the stock market, as weak investor confidence stalls corporate fund raising, Ernst & Young revealed in its global IPO update Tuesday.

Initial public offerings slumped 58 percent in the first 11 months of 2008, compared to the same period last year, the report said.

Video: Gil Forer from Ernst & Young discusses the report.

"Challenging market conditions have clearly impacted investor confidence and willingness to list at this present time," Gil Forer, global director of IPO initiatives at Ernst & Young, said.

Only 745 deals have been recorded in 2008 so far, compared to 1,790 deals in the same time-frame of 2009. This year $95.3 billion has been raised, 63 percent less than in the first 11 months of 2007.

2007 was a record year for IPO activity, with $287.1 billion being raised globally. Since then the stock market has slumped around the world, leaving investors smarting and less willing to invest in newly-floated companies.

Markets need to stabilize before IPO levels can recover, the report said.

Despite the slow-down, the pipeline of companies preparing to list remains robust, Forer said.

Many companies may be using this period to fully prepare themselves for future offerings, the report said, suggesting there could be a surge in IPOs when conditions become more stable.

The top three 2008 IPOs in terms of capital raised were: Visa, which was the largest U.S. IPO in history at $19.7 billion, China Railway Construction and Brazilian energy company OGX Petroleo e Gas Participacoes.