The booming London initial public offering market has come to a screeching halt after reaching near record levels in 2015.
For the first quarter of 2016 the total raised through IPOs slumped to £1.6bn, down from £4bn in the last quarter of 2015, data from accountant EY has shown.
EY also warns that the market for IPO’s is not expected to pick up over the coming quarter. The sluggishness in the market has been put down to volatility and the fast approaching referendum over Britain’s continued membership of the European Union.
Low oil and commodity prices have also weighed on the number of companies looking to come to market.
There have been 15 listings on London main market or the London Alternative Investment Market (Aim) so far this year, three of which, Metro Bank, Countryside Properties, and Ascential, were backed by private equity and accounted for 45 per cent of the total capital raised.
“The UK has experienced a slow start to 2016, brought about largely by market volatility, concerns regarding slowing economic growth and the uncertainty created by the EU referendum. Equally, the pipeline for future listings is strong with companies targeting longer-term listing dates towards the final quarter of this year and beyond,” said Scott McCubbin, EY’s UK and Ireland IPO leader, adding, “What’s also encouraging is that London prevails as the leading market in Europe for IPOs.”
In its IPO Watch Europe 2015 report, accountancy giant PwC last month found London raised £11.9bn through 92 IPOs in 2015, down 16 per cent from the £15.7bn raised in 2014.
London continues to dominate European listings with 45 per cent of flotations on the continent going through on the London main market or Aim.