IPO underwriting volume vaulted 164% in the first quarter from the same period last year, extending a rich revenue stream for such banking companies as Citigroup Inc., Chase Manhattan Corp., and FleetBoston Financial Corp.

Chase has just completed its first full quarter after buying the emerging growth equities specialist Hambrecht & Quist Group, and its position on the league tables - No. 12, with a 1.8% market share - reflects its new purchase. During the first quarter last year, it did not make the top 25 ranking of initial public offering underwriters, according to Thomson Financial Securities Data.

But volatile nature of the business, highlighted by the Nasdaq's plunge in recent days, said to some market observers that this revenue-rich area of investment banking may have already seen its glory days.

"This could be the last best quarter," said Michael Mayo, a banking analyst at Credit Suisse First Boston. "There's no question earnings estimates need to be revisited if the Nasdaq stays at these levels."

During the first quarter, three investment banks dominated the market, leading over 50% of the total deal volume. Goldman Sachs Group Inc. was No 1, underwriting $6 billion deals. Morgan Stanley Dean Witter followed, with $4.8 billion. Credit Suisse First Boston ranked third, leading over $2 billion in first-time equity offerings.

Other banks, like FleetBoston, also saw revenues from equities underwriting grow with the tech-driven bull market. Its Robertson Stephens subsidiary was the seventh-ranked U.S. underwriter of IPOs in the quarter, leading 15 issues, worth $1 billion. This position was two notches higher than during the first quarter of 1999.

Overall, banking companies underwrote 138 deals, worth a tremendous $23 billion.

Despite the manic pace there were signs of "investor fatigue" toward the end, said Doug Baird, co-head of U.S. equity capital markets at Deutsche Banc Alex.Brown, the investment banking division of Deutsche Bank.

Deutsche lead $2 billion worth of deals, for a market share of 8.6% in the first quarter. It rose one spot from the same period last year, to No. 4.

And as the market spiralled downward, Mr. Baird remained sanguine about its impact on future underwriting business.

"Next quarter you'll see a lot less speculation on the part of investors," he said. "Weaker companies and earlier-stage companies will have more difficulty getting their attention."

Clearly, a prolonged tech stock slowdown would dampen banks' IPO underwriting business, which has largely been driven by New Economy and tech-related companies. But it doesn't necessarily mean bad news for other investment banking revenues, said Mr. Mayo.

"It's too early to say whether the pre-H&Q deal flow at Chase will slow down," he said, referring to the fixed-income platform Chase has been developing over the last decade.

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