Slow start for City as listing market plummets
Slow start for City as listing market slumps: Companies raise just £81m in IPOs on London Stock Exchange in Q1 2023
Companies have raised just £81m in IPOs on the London Stock Exchange in a “very slow” start to 2023.
First-quarter figures, compiled by auditor EY, were 80 percent down from the same period last year and come amid a global slowdown in initial public offering (IPO) activity.
The figures will do nothing to mitigate the city’s dismal status as a financial center after a number of companies — including Cambridge-based chip designer Arm and building materials giant CRH — listed their shares in New York.
Challenges: London’s main market saw just two IPOs in the first quarter of 2023, raising £63m. There have been three IPOs in the Junior AIM market, raising £18m
Scott McCubbin, EY’s Head of IPOs UK & Ireland, said: “The London IPO market continues to experience the extremely challenging conditions seen in 2022.
“There remain strong headwinds, including the war in Ukraine, high energy and commodity prices and broader inflationary pressures.”
There have only been two IPOs in London’s Main Market during this period, raising £63m. There have been three IPOs in the Junior AIM market, raising £18m.
That was even worse than last year when around £400million was raised in total. The 2023 figure is 99 per cent below the record £5.7bn for the first quarter of 2021 and there are fears the flimsy bout of activity will continue.
EY said the London stock market had “a very slow start to 2023”.
And McCubbin added: “We expect the market to remain challenging over the next few months, albeit with some green shoots in the form of an expected fall in inflation by year-end.
“However, this remains at risk given the ongoing uncertain geopolitical landscape.”
Globally there were 299 IPOs during that period, raising £17.3bn, down 61 per cent on the previous year and attributed to similar factors to those driving London’s decline over the same period.
The government has been looking for ways to stem the exodus from London.
But yesterday’s figures suggest that ordinary UK retail investors are also losing confidence in the UK market.
A survey by the UK arm of Charles Schwab – a brokerage firm that helps investors get easier access to US stocks – found that the UK now lags behind America, Europe and emerging markets as the most attractive place to invest your money.