London maintains dominance of Europe's IPO market raising £1.7bn in three months

 
Callum Keown
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BRITAIN-LSE-FEATURE
London accounted for almost half of the €3.9bn raised through IPOs in the third quarter of the year (Source: Getty)

London has maintained its dominance of Europe's IPO market, accounting for almost half of the €3.9bn raised in the third quarter of the year.


The London Stock Exchange remained the most active exchange on the continent between July and September despite values and volumes being considerably down in the UK and across Europe as a whole.

Analysts as PwC said the figures showed the City was very much “open for business”.

Read more: David Davis tells EU: Don't use Brexit to disrupt markets

The 16 IPOs in London raised €1.9bn (£1.7bn) during the period, almost half of the total €3.9bn raised across all Europe's principal stock markets.


But that figure was down by 53 per cent on the €8.3bn raised in Europe over the same period in 2017.

Analysts blamed trade issues and geopolitical tensions and warned the “weak” performance of recent IPOs – with both Aston Martin and Funding Circle struggling on debut – and uncertainty surrounding the Brexit negotiations may deter companies from listing over the next few months.

Guarantor loan provider Amigo Holdings had the largest London IPO – raising €407m – followed by logistics firm Tritax Eurobox's €339m.

London had four of the five largest IPOs – but the largest was packaging maker SIG Combibloc's listing on the SIX Swiss Exchange, which raised €1.7bn.

Capital markets partner at PwC, Mark Hughes, said: “Geopolitical headwinds and the summer hiatus muted activity in the third quarter, with European IPO values at their lowest levels for two years.

“The pipeline going into the final quarter looks relatively healthy as volatility continues to be low and there are a number of mega-IPOs expected.”

Luxury carmaker Aston Martin and peer-to-peer lender Funding Circle both struggled as they made their London Stock Exchange debuts last week, with shares falling on their opening day's trading.

Read more: Aston Martin and Funding Circle shares continue to fall after IPOs

Hughes said other firms may be hesitant about going public in the final quarter of the year.

He said: “The weak aftermarket performance of a number of recent IPOs and the wider uncertainty around the Brexit negotiations may deter prospective IPO candidates from completing a transaction on the public markets before the end of the year.”

EY analysts said Brexit uncertainty was “casting a shadow” over the London market and said it faced stiff international competition in the coming months.

<img class="CToWUd m_8031060494365281198gmail-ajT" src="https://ci3.googleusercontent.com/proxy/brwtshoO8pFoWzivuTYTqzcgbWbRGn8NoU8wERg_KJm3_dQfWsYZcw5SQWdMXaW39zaYym3eYNHeLECuyKxBYYGgtAEK-2_yIIyzW_3fVstyQg=s0-d-e1-ft#https://ssl.gstatic.com/ui/v1/icons/mail/images/cleardot.gif" />The company's IPO leader, Scott McCubbin, said global IPO activity levels in the first nine months of the year were above the 10-year median.

He said: “Looking ahead, the recent relatively poor listing performance of London IPOs could be a sign of the difficult times ahead for London stocks.

“It wouldn’t come as a surprise if any further IPOs this year are priced at the bottom of their range."

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