Why are so many flotations being pulled?
Over the last few days we have seen a number of high-profile flotations postponed or cancelled due to market conditions. So what is going on in the UK marketplace?
Only a few weeks ago there seem to be increasing demand for quality new issues in the UK but the last few days, with the Eurozone problem growing by the day, have seen investors step back from new issues resulting in a number of cancellations. It is concerning that this sudden U-turn in investor confidence has impacted upon the new issues market and is likely to impact upon investing patterns in the short term. So what do we need to change this situation?
The main problem for some investors, aside from the fact that the UK recovery is fragile to say the least, is the growing problems within the Eurozone with Greece, Portugal and Spain specified as problem areas. If the Eurozone continues to struggle then this will at some stage impact upon not only the UK economy but the worldwide economy and could potentially push us back towards further economic slowdown.
This is a nightmare scenario for governments around the world and would negate the impact of the hundreds of billions of pounds which had been poured into the financial system over the last two years. Are we standing on the verge of a nightmare scenario?
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