London Stock Exchange listing cash plunges as IPO drought continues
Fresh listings on the London Stock Exchange have raised just £1.6bn in the past year as the City is hit by an extreme drought in public market activity, new data shows.
In the 12 months to the end of June, the amount of cash raised via IPOs plunged 72 per cent as just 30 firms shifted onto the public markets, a year-on-year decline of 78 per cent on the same period a year prior, according to research from UHY Hacker Young Group.
The figures underscore the severity of the public downturn in the capital as regulators and officials look to tempt more firms to float.
London Stock Exchange bosses and the Financial Conduct Authority have been forced on the offensive and have tabled a slew of reforms in a bid to encourage more firms to go public.
The listing slump has also spread well beyond London in the past 12 months. IPOs globally have been largely off the table as war in Ukraine and rampant inflation roiled equity markets, with global float proceeds falling over 60 per cent in the first quarter, according to separate data from EY.
Colin Wright, partner and chairman of UHY Hacker Young Group, said rising interest rates and investor jitters had caused firms to shelve float plans en masse.
“The last 12 months have hit the London market hard. Investor appetite has receded considerably as interest rates have risen which has impacted valuations,” he said.
“A number of IPOs have been put on the back burner as a result.
“With how volatile equity markets have been in recent months, a lot of companies that see an IPO as their next stage to fund growth have decided to hold tight.”
London has felt further pain in recent weeks after Turkish soda ash firm WE Soda shelved its IPO due to “extreme investor caution”.