Shares in the London Stock Exchange Group have plunged this morning as a top broker raised questions over the firm’s long term revenue growth, amid a major slowdown in listings activity.
Shares in the FTSE-100 listed group have fallen nearly 4.5 per cent as bankers at Exane BNP Paribas issued a downgrade to ‘neutral’ from ‘outperform’.
It comes after a turbulent quarter for the group which has seen a major slowdown in listing activity on its two flagship markets.
Fresh figures from accountancy firm EY showed yesterday that 19 firms raised a total of £397m on its two markets between January and March, a stark fall from the same period in 2021 which saw 14 firms raise a combined £5.6bn.
Analysts say a wobble for the group was expected after a frenzied year on the markets.
“It was inevitable that after two bumper years there would be a slowdown in IPO activity during 2022. The war in Ukraine, inflationary concerns and interest rate rises have exacerbated that trend,” said Chris Raggett, co-Head of Corporate Finance at finnCap.
“While we can hope for a resolution of the former, the latter two issues look likely to sustain throughout the year which means investors will adopt a cautious approach to new listings.”
But Raggett said it would be premature to write off the year with quality and growing companies always likely to “attract an audience on the capital markets.
The slowdown comes as the group looks to push into the private markets in recent months, with boss Julia Hoggett telling industry leaders last week that the group had ambitions to be “genuinely indifferent” over whether a firm is public or private.
The group announced a partnership with private fundraising fintech Floww last month to accelerate its push into private markets.