London IPOs flagging behind rest of world

THE LONDON market for new company share offers is lagging behind the rest of the world, a report out today by Ernst & Young claims.

The total value of capital raised from initial public offerings (IPOs) in the second quarter of this year hit $64.6bn (£40.2bn), up 38 per cent on the same period a year earlier.

In the UK, the total value raised from IPOs hit about $14bn in the second quarter, boosted by the $10bn mega-float of Glencore.

Excluding the commodities colossus, listings in London generated just 36 per cent more than the $2.94bn raised in the second quarter of 2010.

In comparison, floats on North American exchanges raised about 90 per cent more in the past three months of this year than in the second quarter of 2010.

Ernst & Young’s IPO leader, David Vaughan, told City A.M.: “As well as fears over a Greek default, there’s absolutely no doubt that we’ve got increasing disharmony between varying market participants, as well as concern over companies trying to come to market at prices investors are feeling too rich. That’s what’s causing London’s problem at the moment.

“The market needs to stabilise, it’s in everyone’s interest.”