The fate of nearly $38 billion of planned US company flotations is hanging in the balance this week as investors’ appetite for new share offerings wilts in the face of growing turmoil in world financial markets.

Some 230 initial public offerings (IPOs) are in Wall Street’s pipeline, as companies such as Dolan Media, the US newspaper group, and Amedica, the orthopaedic implant company, seek a total of $37.9 billion (£18.7 billion) from the sale of new shares.

On Friday night, the vice-president for finance at Dolan Media, Vicki Duncomb, told The Times that while the present plan was to proceed with a flotation within the next month, a number of conversations were now taking place about its feasibility.

Kohlberg, Kravis, Roberts (KKR), the buyout firm that this month filed to raise $1.25 billion in an IPO but has yet to set a date, is also thought to be reconsidering the float.

Many other planned IPOs are expected to be postponed or cancelled after last week’s slump in shares on both sides of the Atlantic triggered by investors’ escalating fears of a credit crunch that threatens to undercut the global boom in corporate deals.

In a symptom of how liquidity in world markets is drying up, the value of high-yield corporate bonds issued in the US to finance deals plummeted this month to $2.53 billion, the lowest level since October 2002, and less than 12 per cent of the $22.5 billion raised in June. As investors took fright, the benchmark S&P 500 index last week suffered its worst trading in nearly five years, falling by 4.9 per cent.

America’s plight of falling shares, rising interest rates and tightening financial conditions is mirrored in the UK, throwing planned IPOs on the London Stock Exchange into doubt. Ian Shepherdson, of High Frequency Economics, predicted that falling demand for IPOs would follow dwindling demand for bonds. Mr Shepherdson said: “The UK is the slave not the master here, in terms of markets. Bond issuance will slow in the UK as well, it will follow America. This is a very real contagion.”

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