Slow start for City as listing market collapses: Companies raise just £81m in IPOs on London stock market in Q1 2023
Companies managed just £81m in IPOs on the London stock market in a ‘very slow’ start to 2023.
The first-quarter numbers, compiled by accountant EY, were 80 percent lower than the same period last year and come amid a global slowdown in the initial public offering (IPO).
The numbers will do nothing to ease gloom about the city’s status as a financial center after a number of firms – such as Cambridge-based chip designer Arm and building materials giant CRH – listed their shares in New York.
Challenges: London’s premier market saw just two IPOs in the first quarter of 2023, raising £63m. There were three IPOs in the junior AIM market, raising £18 million
Scott McCubbin, EY’s IPO leader for the UK and Ireland, said: ‘The London IPO market continues to experience the extremely challenging conditions we saw in 2022.
Strong headwinds remain, including the war in Ukraine, high energy and commodity prices and broader inflationary pressures.
London’s main market saw just two IPOs in that period, raising £63 million. There were three IPOs in the junior AIM market, raising £18 million.
That was even worse than last year, when a total of around £400 million was raised. The figure for 2023 is 99 per cent below the record £5.7bn for the first quarter of 2021 and it is feared that the worn-out period of activity will continue.
EY said the London stock market witnessed ‘a very slow start to 2023’.
And McCubbin added: “We expect the market to remain challenging in the coming months, albeit with some green shoots in the form of an expected reduction in inflation towards the end of the year.
“However, this remains in jeopardy given the continued uncertain geopolitical landscape.”
Globally, there were 299 IPOs in the period, raising £17.3bn, a 61% drop on last year and attributed to similar factors to those that drove London’s decline over the same period.
The government is looking for ways to counter the exodus from London.
But yesterday’s figures suggested that ordinary UK retail investors were also losing confidence in the UK market.
A survey by the UK arm of Charles Schwab – a brokerage that helps investors access US equities – found that Britain is now trailing America, Europe and emerging markets as the most attractive place to invest their money.