London finishes the year with a last minute flotation flurry

David Hellier
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Weather permitting, Veysel Aral and his team will be at the offices of the London Stock Exchange on Monday morning to celebrate a coup.

For Aral has become the latest of an elite batch of chief executives who have managed to float their companies on the London Exchange’s main market this year

Aral runs Kcell, a Kazakh mobile telecoms group that announced yesterday it was going ahead with an initial public offering (IPO) of shares that will see its Swedish strategic investor TeliaSonera selling $525m of stock in the group.

The IPO comes at the end of a dismal year in which volumes of flotations in Europe, the Middle East and Africa (EMEA) fell to a third of what they were in 2011, according to data compiled by Bloomberg.

Companies in the EMEA region raised $12.4bn in IPOs in 2012, compared with $37.3bn in the previous year as investors naturally fretted over the uncertainties of the region’s financial markets.

The uncertainties and disagreements over price have caused a number of IPOs during the year to be pulled, including two Russian ones, Promsvyazbank and QI Properties, as well as a couple of potential bumper issues such as Graff Diamonds in Hong Kong and Evonik in Germany.

London has been smarting badly, hosting only one domestic flotation of any size, and that a forced sale of a stake in Direct Line insurance by RBS bank.

Altogether 2013 has spawned just five main market floats of trading groups in London, with four of them coming from eastern Europe or Russia.

Indeed, until Direct Line successfully floated in October this year, the London market was effectively closed for business, with UK fund managers largely on strike as far as new issues were concerned.

So it is encouraging that since Direct Line there have been two telecoms flotations in London - the first being Alisher Usmanov’s Megafon - and also yesterday saw the flotation of a property-based investment group, Starwood European Trust. Those who think the UK is being too lenient in terms of its admission rules for Russian or eastern European companies might care to look at the statistics excluding our eastern European friends.

So what is the appeal of Hector Sants, the former chief executive of the Financial Services Authority, who is joining Barclays Bank as its compliance officer in January?

After paying out a fine of £290m for its involvement in the Libor interest rate manipulation scandal, Barclays is hiring the man who was the top industry regulator for its battered sector.

As far as new chief executive Anthony Jenkins is concerned, the appointment makes clear that he is getting to grips with the culture.

The hire probably would not have appealed to the bank’s former chief executive Bob Diamond who, according to letters disclosed during the Treasury Select Committee hearings over the Libor affair, didn’t enjoy the best of relationships with those at the top of the FSA. But then that too must be one of the attractions.

Nick von Schirnding, who took over as CEO at troubled Bumi yesterday, needs nerves of steel as he tries to navigate his way between Nat Rothschild and the Bakrie family. “I want to put an end to all the in-fighting,” he told me yesterday. Famous last words or a man on a mission? Good luck Nick.