Investors are gearing up for another strong year of listings on Germany's stock market in 2008 with up to four heavyweights in sight despite turbulence on global equity markets, bankers said.
"We are cautiously optimistic for 2008," said Joachim von der Goltz, co-head of equity capital markets at J.P. Morgan. "We are expecting more than 20 IPOs with an issuing volume of more than 100 million euros each," he said.
Possible top candidates included German rail operator Deutsche Bahn, industrial conglomerate Evonik, German regional state bank HSH Nordbank and Germany's third biggest-insurer Talanx, bankers said.
"With Deutsche Bahn and Evonik it will be less dependent on the market situation than on the companies' own development. There will most definitely be a market for them," said Andreas Bernstorff, managing director of equity capital markets at Citigroup.
Global equity markets took a sharp downturn after hitting record highs in July, as problems in the US mortgage market prompted banks worldwide to reassess their investment structures and issue massive writedowns, leading to a liquidity crunch. The market's downturn put off several companies and while 18 companies listed in Deutsche Boerse's prime standard segment in the first half of the year, the second half featured only five and several candidates postponed their plans.
The total issuing volume was more than 7 billion euros ($10.17 billion) in 2007. For 2008, Germany's benchmark DAX index is in for a rise of around 6.3 percent, about a third of the annual gains it has managed over the past several years, a Reuters poll of equity strategists showed.
J.P. Morgan said equity markets remained open for high quality issuers, provided they offer a convincing equity story, strong management team and strong cashflows combined with attractive growth prospects.