London’s share of global IPOs lowest since 2012（453 words）

By Thomas Hale and Zosia Wasik

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London has started the year with its lowest share of global initial public offerings since 2012, even as the number of IPOs around the world has jumped sharply.

There have been $2.2bn of new listings across 16 deals in the UK so far this year, according to Dealogic data, making up only 6.4 per cent of global activity.

Over the same period in 2016, UK volumes, which were flat at just over $2bn, accounted for 16 per cent of global volumes. In 2015 by this stage, more than $5.5bn had been raised, making up 14 per cent of the global total.

A total of $34.6bn has been raised in IPOs around the world this year, compared to $13.8bn over the same period last year. But UK volumes have failed to rise, with analysts pointing to the “political overhang” of the Brexit vote and investor caution.

“It [Brexit] has had an impact,” said Lucy Tarleton, a director at PwC. “We had a slow start to 2016 partly because of the uncertainty over the actual result of the referendum, and we then had the Brexit result which has continued to cause some uncertainty,” she added. “The IPO markets don’t really like uncertainty”.

The UK is the third-largest global venue for IPOs in 2017, but is dwarfed by the US and China, which have hosted more than $20bn of deals between them. The weak relative performance comes after a difficult full year in 2016, in which UK volumes came to just 5 per cent of the global total, according to Dealogic.

Alongside political concerns, several other factors have contributed to lower volumes.

“The pipeline of private-equity backed IPOs has certainly reduced, which would explain partly why we haven’t seen a significant number of IPOs to date,” said Ms Tarleton.

The London Stock Exchange said in a statement to the Financial Times that UK markets were “resilient and open to investors around the world”. Bankers and lawyers suggested that while UK IPO markets have been quiet, there is a “healthy pipeline” for new deals this summer, in part because of timing related to the disclosure of company results.

“Most of the deals that I’ve seen in pipelines are businesses that aren’t as eurozone focused,” said Edward Bibko, Emea head of capital markets at Baker & McKenzie, the law firm. “We’re seeing a lot of emerging market issuers that are looking to list into London right now — I do think we’re going to see an uptick in cross border”.

“I think most people have come to the logical conclusion — Article 50 or not, London still has all the attributes that make it one of the greatest places to list in the world,” he added.