After a year of being virtually ignored by those organising fund-raisings on the London stock market, the retail investor is heading back to the stock market.
As we report today, the tool hiring specialist HSS intends allocating a tranche of its shares in its forthcoming flotation to retail investors. This follows Trainline.com’s decision to do the same last week.
After the way in which private investors scrambled to apply for shares in Royal Mail, one might have imagined a greater involvement with retail investors in last year’s flotations, but that turned out not to be the case. Only three out of the top 10 London flotations contained a retail element.
Many issuers, strengthened by the enthusiasm for flotations from institutional shareholders and foreign investors during the first half of the year, kept retail investors at bay. Too complicated, the advisers said, and too time-consuming.
There were exceptions, such as the Saga and Pets at Home flotations, but disappointingly both of these issues performed relatively badly in the aftermath of their floats.
Over the past, mainly barren year, for retail floats, retail share issue experts such as Solid Solutions (advising on the HSS issue) and Scott Harris have been pointing out that retail issues do not have to be too complicated and they have shown how retail can be successfully integrated into mainly institutional offers. Their hard work seems to be paying off, at last.
HSS and Trainline both have STJ, Numis and JP Morgan advising on their share issues.
As the retail investor ventures back into the market after a long and somewhat enforced lay-off it makes sense to go gently. The private investors represent a big chunk of demand and need to be treated with care.