LSE cash calls boosted by rising market
LEVELS of secondary fundraising on the London Stock Exchange have soared by 80 per cent over the year so far as companies scramble to take advantage of the upturn in market sentiment to raise cash.
Cash calls on the LSE’s main market raised £56.2bn between January and August this year, a substantial increase on the £31.2bn raised in the first eight months of 2008 and a sign that the flood of rights issues anticipated this year is well under way.
Nick Langford, head of international business development at the LSE, said the global new issue market remained subdued, but added: “The exchange remains the world’s capital market, and a robust capital raising centre. Our markets have remained liquid and open for business during the financial crisis.”
The Aim market has seen £2.4bn raised in further issues so far this year, down slightly from the £2.8bn raised in the same period last year. But the data shows that prior to the annual summer lull in August, over £800m was raised through further issues in July alone, the strongest month on Aim since December 2007.
“This robust activity in Aim’s secondary market is a reflection of the Aim community’s long-term support for small and mid cap companies,” said Marcus Stuttard, head of Aim.
The largest cash call of 2009 so far is HSBC’s record-breaking £12.9bn rights issue in March, followed by the £7.3bn raised by mining giant Rio Tinto in June.