This is just the start of it, and one tiny aspect of the rapidly widening impact of Japan’s worsening nuclear crisis.
Not only did the failed attempts by Tepco, operator of Japan’s cripplied Fukushima nuclear power plants, to cool down over-heating fuel rods spark a selloff in global stock markets. Investor fears of the widening impact of a potential disaster at the plants is hitting demand for new equity.
That, in turn, caused French publishing group Lagardere to delay the initial public offering of its Canal Plus France stake and, according to Bloomberg. is now weighing on plans by commodities trader Glencore for an IPO.
Lagardere said on Wednesday it is delaying the initial share sale of Canal Plus due to market volatility following the quake. Glencore, which has been studying a $10bn IPO, lost $3.4bn in listed mining-company investments in the past month, which, noted Bloomberg, could be a setback for a sale.
Stocks fell across Asia on Thursday amid concerns about the escalating crisis in Japan. Coming after weeks of Middle East turmoil, the fear taking hold now could well halt the recovery in IPOs that began gaining ground in 2010.
As for other consequences of a full-blown nuclear crisis, the list is only just being compiled. As the FT noted on Tuesday:
Just as it looked like 2011 would see a return to stockpicking and a more discerning approach after the “risk-on, risk-off trade” that dominated much of last year, prices of many asset classes, from equities and bonds to currencies and commodities gyrated in a flight to safety….
… Most investors agree a full-blown nuclear crisis in Japan would throw all forecasts for growth and earnings worldwide off course. But, absent that, investors are divided over how serious the sell-off is.
Related links:
In-depth: Japan earthquake – FT.com
What’s moving the yen - FT Alphaville
Japanese repatriation pressure points - FT Alphaville
Yen reverberations – FT Alphaville