German revival in tech stock IPOs (FT)

Germany is witnessing a rebirth of initial public offerings in technology stocks, as investors conquer their fear of questionable IPOs created by the boom and bust of the infamous Neuer Markt.

Emboldened by a stream of wind and solar power flotations last year, dozens of dotcom-style businesses have begun queueing up to list, with many of those that have listed so far proving successful.

The number of listings in Germany remains modest by standards in the UK or other western European markets, but the return of the German tech flotation marks a huge turnround in sentiment.

Until mid-2004, there had been a two-year drought in the German IPO market. Last year there were 14 listings and bankers are predicting up to double that number this year.

Listings are expected from Ecotel, a telecoms company, and Magix, a software developer.

Andreas Bernstorff, head of equity capital markets at Dresdner Kleinwort Wasserstein in Frankfurt, said: “The market showed its interest in high-growth companies last year. Investors are interested in new stories.”

Bankers believe the success of tech company listings could encourage more traditional companies, such as media or property businesses, to list.

The continued and growing interest among foreign investors in all things German has spurred the IPO market.

But the tech boom in particular has been aided by the decision of Deutsche Börse, the German stock exchange operator, to create a market segment for small, growth companies. In October, three years after axing the six-year-old Neuer Markt, it launched the Entry Standard.

The Entry Standard has increased liquidity markedly, according to IFA systems, which specialises in IT for opticians and has seen its share price rise by a third since moving to the segment last October.

The segment now has 27 listings; some transferred from the main market, but five have been new IPOs.

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