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Investor appetite wanes as New Look pulls float

It looks as though investor appetite for new issues is starting to weaken with the New Look IPO the third high-profile flotation to be pulled over the last week. Only a few weeks ago it would appear that demand for new issues was growing and a number of companies were looking towards the UK market to raise additional finance. So what has happened?

The official reason for the postponement of the New Look issue is an "unfavourable market backdrop" which effectively translates into a lack of demand for shares. This is a company which has turned itself around over the last few years and indeed initial demand appeared to be fairly high and there were hopes for a smooth floatation. While the UK economy has yet to prove beyond reasonable doubt that it has pulled away from recession, it is the outlook in Europe which is causing most concern for investors.

The situation regarding the Greek economy appears to be worsening, the German economy has stalled and there are concerns that the EU may not be in a position to offer bailout funding to the likes of Greece, Portugal and Spain. Whether these are short-term issues which can be resolved remains to be seen but they are causing unrest amongst investors.

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