Big companies shy away from London floats

Marion Dakers
LONDON’S Alternative Investment Market (Aim) was the venue for the vast majority of UK initial public offerings in the last three months while the main market remained in the doldrums, according to figures from Ernst & Young out yesterday.

Aim hosted 11 listings in the second quarter, compared to just one IPO on the London Stock Exchange – that of Abu Dhabi-based NMC Health.

Both exchanges saw new entrants cut in half compared to 2011, reflecting a global slump in the equity capital markets as turmoil in the Eurozone puts the brakes on corporate fund-raising goals.

The amount raised through IPOs picked up slightly during the three months to the end of June to hit £213.19m, though the market trails far behind the same quarter in 2011, which saw £7.74bn raised, including Glencore’s mammoth £6bn float.

The main market saw several foreign firms withdraw from planned listings, including Russian group Megafon and state-owned Georgian Railway.

The junior market seemed to bely the gloomy figures, attracting a range of small-cap firms, including UK software group WANdisco and Chinese online retailer Global Market Group.

But by the end of the quarter, only six out of 11 firms to join Aim closed above their float price, partly a victim of global turbulence in equities.