GLENCORE recently pulled off a $11bn flotation, London’s largest ever, but the past few months have otherwise been pretty desultory in terms of new companies coming to market.
Some blame last year’s flotation of Ocado, the online grocer, for starting the rot. Ocado’s share price has recovered well from its early post-IPO malaise but bankers say that investors felt at the time that they were sold a pup and that they have not forgotten that in a hurry.
In the last few months, around half of the Russian companies that planned to raise money in London have been forced to withdraw their plans, as investors balked at the valuations and general corporate governance issues.
But it hasn’t just been Russian groups that have failed to whet the appetite of the UK investment community. Solid UK groups like Edwards, the vacuum technology company, and online payments service Skrill, were also forced to pull their issues.
As Skrill chairman Bob Wigley put it to City A.M. earlier this week: “The US market is alive and on fire and the London market is in effect closed. So perhaps there are factors other than market dynamics at work.”