So far, it's great. Eager investors, new to the equity markets, rush to buy airline stocks. But there's a warning from Singapore . . . By Quek Peck Lim
A tempting new line of stock is about to be fed to investors around the world from countries as far apart as Italy and Japan. Encouraged by the global boom in most stock markets, governments around the world are competing with each other to put back in private hands some of their most famous companies, in the largest sell-off of its kind in the history of the equities market.
But the unloading of state-owned companies coincides with a record number of companies going public in many of the stock markets that will be called on to subscribe to the shares of the privatized institutions. Last year, more companies went public in West Germany, Austria and Italy than in the previous 20 years. That's built up such a crush of new share issues in 1986 that the world's privatization programme is in danger of derailment. Brokers and bankers, bouyed with confidence at their success through 1984 and 1985, are sanguine about the market's capacity. But as yet more companies go public, they raise the question whether the 1986 global sell-off is heading for disaster.