London’s IPO market dries up – report

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The number of firms listing on the LSE is significantly down this year, KPMG research shows

The volume of funds raised by companies listing in London has nosedived by more than 90% this year, according to a new report by global consultancy KPMG, which attributed the drop-off to weak economic growth forecasts.

The data, which was published on Wednesday, shows that only 40 firms have floated on the London Stock Exchange’s main and alternative investment markets so far this year. That’s down from 123 last year, although it is up from 38 in pandemic-affected 2020, KPMG said. Total funds raised plunged from £14.3 billion ($17.7 billion) to just £1 billion ($1.2 billion), the report says.

London hasn’t had a single initial public offering (IPO) of a billion dollars or more this year, and only five deals raised over $100 million, with the largest listing being a $757 million share sale by a Chinese maker of wind turbines.

“The flood of IPOs that we saw in 2021 became more of a drought this year, as adverse macro conditions and a sense of investor fatigue made for a perfect storm, ultimately closing IPO markets in the UK and globally throughout 2022,” said Svetlana Marriott, head of KPMG UK’s Capital Markets Advisory Group.

The report indicated that last year’s high-profile London debuts, including fintech firm Wise, delivery company Deliveroo, and shoemaker Dr Martens, are all significantly down on their listing prices.

The disappointing result this year comes amid a broader slowdown in IPOs, which were down 45% year-on-year during the first three quarters globally, according to S&P Global.

Bloomberg released a report last month showing that London had lost its title of having Europe’s largest stock market to Paris amid recession fears in Britain.

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