London verges towards record share issuance

Michael Bow
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LONDON’S booming stock market is on track for its biggest fundraising haul in a decade, after the first five months of this year outpaced the same period in 2007, figures show.

A total of 40 companies have raised £5.7bn since the start of the year, according to Thomson Reuters, topping the £4.93bn raised in the same period in 2007.

This year’s cash mountain also beats the £4.58bn raised in the first five months of 2005 and the £2.91bn generated by flotations in 2006.

Despite the lukewarm performance of newly listed companies this year, a host of well known brands are also treading the path to market – paving the way for a record breaking year.

The best 12-month period for fundraising is currently 2006, with £12.1bn of new money raised through share issues, the data reveals.

Around £11bn was also raised in 2005 and £10.7bn in 2007, before the market shut in 2008 when just £504m was raised.

But the 40 stock market flotations in the UK this year are not enough to top the 68 firms that came to market in 2005 and 66 companies which followed in 2006.

Several well known businesses are set to join the swelling ranks of London’s public markets by pursuing a listing this year.

Motor vehicle breakdown service RAC is the latest firm to be limbering up for a stock market debut after owners Carlyle Group appointed advisers from Barclays and Goldman Sachs to help plot a flotation.

It would follow peer AA, which on Friday announced plans for an accelerated initial public offering at 250p a share sold to cornerstone investors.

The two are set to join other firms like rail station shop operator SSP and sofa chain DFS in coming to market, alongside Lloyds Banking Group’s TSB which unveils plans this morning.

Current market conditions are in stark contrast to the market low of 2009, when just six firms floated in 12 months, raising £471.4m in total, according to Thomson Reuters.