There were only 68 new issues in the whole of 1998, raising less than pounds 3.9bn between them. This compared with 100 deals raising pounds 6.7bn in 1997 and 218 deals raising pounds 10bn in 1994.
The level of activity continued to decline into the fourth quarter, when there were only 14 deals, raising pounds 147m.
"The new issues market virtually closed down at the end of July - after the sharp fall in the stock market - and there is no hint of an upturn on the horizon," said Neil Austin, head of new issues at KPMG corporate finance yesterday.
The desperate position of the new issues market, which also affects smaller quoted companies looking to raise more money through rights issues, is forcing smaller companies to resort to private equity or bank loans.