Flotations outperform FTSE by over five per cent

Michael Bow
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New listings on the London stock market have generated better returns for investors than the FTSE 100 this year, despite some prominent private equity-backed flops, a survey shows.

The 28 initial public offerings of shares between the turn of the year and the end of August achieved an average return of seven per cent – far above the 1.5 per cent returned by the FTSE 100 share index.

Deloitte head of capital equity markets John Hammond said: “Some of the frothy pricing of the first quarter dissipated in the second quarter and, as a result, nearly all the IPOs that completed in the weeks before the summer holidays outperformed the market.”

Some the worst performers floated towards the start of the year, with shares in online retailer AO World, pet retailer Pets at Home, Just Eat and Card Factory all still trading below their issue price.

Strong performers include Clipper, Game and B&M.