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Internet is no longer a terrorizing word to investors

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CIOL Bureau
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Elena Molinari

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NEW YORK: The market for new equity issues must really be getting better if

investors are willing to take a look at a company like Lawson Software Inc.

There is nothing wrong with Lawson Software, which will go public this week.

But the fact that the word "Internet" is mentioned 10 times in the

company's prospectus would have spooked away most potential buyers a few months

ago.

But times have changed.

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"Investors are looking at earlier-stage and higher-growth

companies," said Doug Fawell, head of equity capital markets at UBS Warburg.

Lawson Software, which aims to raise up to $205 million through Lehman Brothers

and J P Morgan, develops software for management applications and e-commerce

solutions.

The last Internet-related company to come to market was Convergent Group

Corp., which held its IPO in July 2000 and was later acquired by oil-services

giant Schlumberger Ltd. Since then, Internet stocks have been mostly a source of

disappointment for their shareholders.

"Investment bankers are testing the waters to see if investors are ready

for this kind of issue," said Tom Taulli, analyst at NetCap Ventures and

author of the book "Investing in IPOs." "If they are, next year

bankers can literally flood the market with high-tech IPOs."

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Investors may be more open to technology, warned Fawell, but they are still

very selective. "We all anticipate that technology will come back," he

said. "But when it does it will be more heavy-duty software companies, of

the likes of Oracle, or infrastructure companies, or Internet security

companies."

Lawson Software, to be true, is not exactly a dot-com start-up. It was

founded in 1975, and, most of all, it has already turned the corner of

profitability.

To play on the safe side and attract investors, Lawson a month ago lowered

its expected price range to between $13 and $15 from between $15 and $17. The

price is appealing, Taulli said, especially considering that some battered

high-tech stocks have surged lately.

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Demand is stronger, volume still low



Encouraged by staggering gains in the broad market -- the Dow industrials rose
8.6 per cent, the Nasdaq 14.2 per cent in November -- investors snapped up

shares of 12 new equity issues last month, making November the second most

active month for IPOs this year. November IPOs gained an average 15 per cent on

the first day of trading.

December is poised to break that record, bringing to market 13 IPOs -- while

only eight were priced in December 2000 -- as bankers rush to capitalize on the

recent market run-up before the traditional two-week year-end break in stock

offerings.

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Next week alone bankers will offer to investors nine new stocks in six

different sectors. It will be the busiest week of the year. What the IPO market

is still lacking is volume, market watchers say. In November the 12 IPOs raised

only $1.4 billion, just four per cent of all the IPO dollar volume this year,

according to Frank McGee of Dealogic.

December volume will be over $5 billion, but the $3 billion offering from

insurer Prudential Financial will make up the bulk of it.

"People are looking to put money back in the equity market, especially

with Treasury yields so low," said a banker who declined to be identified.

"But December offerings will provide little guidance. We'll judge the IPO

market's health from next year's round."

On this week's IPO calendar there is also Aluminum Corp of China Ltd. (Chalco),

the world's third-largest alumina refiner and China's largest aluminum producer,

which was created just two months ago. It will seek a public listing in New York

under the symbol "ACH", as well as in Hong Kong. It aims to raise up

to $480 million through Morgan Stanley and China International Capital Corp.

(C) Reuters Limited.

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