Oil, gas and mining companies have enjoyed a four-fold boost in fundraising this year, amid a commodity price boom with companies rushing to bring projects back online.
The UK-listed sectors raised £1.1bn in new equity in the past 12 months – a 307 per cent increase from the £270m, raised last year, according to UHY Hacker Young.
Oil and gas prices have risen to multi-year highs in recent months, while metal prices rebounded strongly from Covid-19 lows.
Meanwhile, the unexpectedly strong economic recovery post-pandemic has fuelled demand for commodities.
While this has caused continued problems for the domestic energy market, it has strengthened the performance of the London Stock Exchange (LSE).
Following the bounce back in prices, oil, gas and mining companies have been looking to raise money as they rush to bring previously mothballed projects back online.
UHY Hacker Young also argue the sectors are benefiting from a positive reputation due to prominent LSE listings.
The FTSE AIM indexes have a reputation for helping oil, gas and mining stocks develop while improved governance controls and reporting standards has boosted investors perception.
It also argues institutional investors have been more willing to back commodity companies in the past year, as sentiment towards oil, gas and mining stocks turns increasingly positive.
Daniel Hutson, partner at UHY Hacker Young, explained the market for commodity stocks is particularly among midcaps and AIM stocks.
He said: “AIM is one of the strongest stock markets globally for oil & gas businesses. The last 12 months were a significant test, where investors were asked to back these businesses during an unprecedented period of economic turmoil. AIM passed that test with flying colours.”
Commenting on investor sentiment, he added: “Institutional investors in particular are now more willing to put their hands in their pockets. Demand for a wide range of commodities isn’t going to fade any time soon. People will still need oil, gas and metals for many years to come.”