A year ago, Asian initial public offerings were so popular that investors literally were queuing up around the block to get shares. It would still be months before anyone got even a whiff of the subprime crisis, and the region was flush with liquidity from hedge fund managers, mutual funds, and high-net-worth investors. The Shanghai, Hong Kong, and Mumbai markets were on fire and the IPO pipeline was positively gushing with companies eager to tap markets and investors happy to part with their money. It wasn't uncommon for shares to see triple-digit gains on their first day of trading as everyone from tea ladies to tycoons jumped on the gravy train.
But these days the contrast couldn't be starker. With the shock waves of the subprime crisis continuing to spread and bears stalking equity markets worldwide, the global liquidity crunch has taken a heavy toll on Asia's IPO market (BusinessWeek.com, 1/16/08). Financial hubs Hong Kong and Singapore are feeling the pinch the most. Hong Kong has had just one listing this year, New Media Group Holdings, and the IPO raised a mere $13.1 million.