Katrina not seen derailing US IPOs

Hurricane Katrina's impact on the robust US initial public offering market won't be clear until later this month, but analysts do not expect the disaster to stop companies from going public.
The last time an IPO priced in the United States was before Katrina slammed into the US Gulf Coast on August 29, knocking out oil production and refining operations and sending gasoline to $3 a gallon or more in much of the country.
In the immediate wake of the hurricane, US stocks declined on worries that higher fuel and transportation costs would squeeze corporate profits and curtail consumer spending.
The fortunes of the IPO market are often tied to the broader stock market, and sudden shocks - like a massive hurricane - can temporarily derail IPOs as investors pull back due to uncertainty.
But Katrina hit during the US Labour Day holiday lull, and with no offerings on the calendar, the IPO market avoided any knee-jerk reaction to the storm.
Now, the broader market has started to rebound, and by the time IPOs start pricing again the week of September 19, investors will have a clearer idea of the implications of the disaster.
"I don't know that there's anything about Katrina at this point that has not been turned over, dissected, or put under a microscope a thousand times," said David Menlow, president of IPOfinancial.com. "We'll start to see some relief from this to the point where the market won't be focusing on it as much."
The US IPO market finished August on a high note, with 36 IPOs raising $6.4 billion, according to data provider Dealogic. It was the highest number of IPOs to price in a month since August 2000, according to Dealogic.
"The IPO market itself obviously has been having a great run in '05," said Mark Hantho, global head of equity capital markets at Banc of America Securities.
Of August's IPOs, 83 percent priced within their expected range or above it, and the average first-day return for IPOs in August - excluding China's largest Web search company, Baidu.com - was 10.3 percent, according to Dealogic.
Shares of Baidu.com, which has been described as the Chinese Google, more than quadrupled on their first day in the most spectacular US market entry in five years.