Signs of life appear for the London Stock Exchange as activity ‘gathering momentum’

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The London Stock Exchange has had a challenging 2024 so far, although bankers are eying a rebound for IPOs
The London Stock Exchange has had a challenging 2024 so far, although bankers are eying a rebound for IPOs

The listings of Raspberry Pi and Air Astana have helped stimulate a small revival of IPO activity on the beleaguered London Stock Exchange this year, an analysis from Ernst & Young (EY) has shown.

Eight companies chose to float on either the London main market or AIM between January and the end of June, raising a total of £513.8m.

The green shoots follow what has been a dismal run for UK listings, which reached its nadir last year when just 23 companies floated in what transpired to be the quietest year on record since 2010.

Despite the minor recovery, the total proceeds raised this year are still slightly down on the £593.2m raised in the first half of 2023. IPO activity is growing after bottoming out in the fourth quarter of 2023.

Five companies listed between April and June, raising £225.0m.

The largest of these was Raspberry Pi, which raised £172.9m when it floated in June, whilst AOTI Inc was the largest listing on the Aim market, a growth market for smaller companies, raising £35.1m.

Scott McCubbin, EY UKI IPO Leader, said: “The London stock market is steadily gaining momentum after a challenging two years stifled by macroeconomic and geopolitical uncertainty.

“The forthcoming UK election outcome is expected to provide businesses with much-needed regulatory and policy clarity.

“Additionally, proposed revisions to simplify the UK listing regime to attract more start-ups are set to take effect later this month. These reforms have been broadly well-received by the market and will enhance the UK’s appeal as a global listing destination.

“This renewed sense of optimism, combined with a robust pipeline of companies planning to list, will strengthen market confidence in Europe’s largest stock market. We expect a resurgence in IPO activity in the latter half of 2024 and early 2025.”

Having been in the doldrums for several years, sentiment on the London markets is starting to look up.

Optimists point to Shein’s potential ‘mega-float’ as being a sign of life in the UK’s capital markets.

But others say the controversial fast fashion brand’s IPO, which only chose the London Stock Exchange after abandoning plans for a US listing, is the exception that proves the rule.

The EY analysis said global IPO volumes fell by 12 per cent in the first half of this year, and proceeds also fell by 16 per cent.

In total, 551 IPOs raised $52.2bn (£40.7bn), with EY attributing the dip to a slowdown in Asia-Pacific IPO activity.

On the other hand, The Americas and EMEIA saw robust growth.