London IPO market slumps below Istanbul and Milan
The London Stock Exchange has slumped below Istanbul and Milan in terms of IPO activity this year as the Square Mile is hit by a drought in its listings market, new research has revealed.
The London Stock Exchange (LSE) was third for European stock exchanges in the first six months of the year with just seven IPOs raising a total value €656m (£500m).
London was outpaced by both the Borsa Istanbul, which hosted 21 floats worth €1.2bn, and the Borsa Italiana, which came in second place with nine IPOs raising some €1.15bn, according to research from PwC.
The figures underscore a troubling period for London’s capital markets as listings dry up amid surging inflation and historic volatility triggered by Russia’s invasion of Ukraine last year.
Regulators and politicians have been on an offensive in the UK to try and breathe life into the market, with the Chancellor Jeremy Hunt launching a number of reforms this week to try and scrap the red tape around listing in London.
London’s slump has come amid a wider downturn in capital markets activity across the continent.
The second quarter of the year delivered 25 IPOs across Europe raising €2.1bn, an increase on the first three months of the year but down on the same period of 2022, which saw 36 IPOs raise €2.4bn.
Kat Kravstov, capital markets director at PwC UK, told Morning Wire the market was still being weighed down across Europe by rising interest rates and sticky inflation, as well s a “valuation expectation gap between issuers and investors”.
She added that Milan and Istanbul’s performance was still factional compared to normal levels of activity and was not a signal of confidence over London.
“Italy and Turkey IPO issuance is coming from domestic companies and numbers are small in the context of normal IPO levels – it is not a vote on relative attractiveness of these exchanges versus London,” she said.
“London remains a leader in the follow-on issuance in Europe, demonstrating continued investor appetite in their existing portfolios.”
London’s biggest planned IPO of the year, Turkish soda ash firm WE Soda, was scrapped last month due to what it called “extreme investor caution”. The London Stock Exchange has since hosted the £850m float of CAB Payments this month, the biggest IPO this year.