As Brexit s effects and economic turmoil take their toll, the share of European initial public offering proceeds has shrunk to a 12 year low.
Just $1.38 billion has been raised through IPOs in London this year, representing 14% of the European total, according to the data compiled by Bloomberg. It was the lowest share since 2010, when London contributed 13% of European offering proceeds.
Since the country s split with the European Union challenged London's standing as a global financial center, IPOs have been losing steam in the UK. A number of high-profile listing flops have also eroded confidence, while a steep rout in UK assets last week following the new government s unveiling of the biggest fiscal giveaway in half a century won't help the cause of the city.
Matt Evans, a portfolio manager at Ninety One Plc, said that some of the more challenging conditions probably have played a role in making companies more cautious before a listing.
Since the IPO, Deliveroo Plc has dropped 79% among firms in London, while Dr Martens Plc is down 32%.
In the wake of Russia's invasion of Ukraine and a worldwide equities rout, a lack of listings in the world has worsened the predicament of the UK capital, which is in the midst of its quietest listing period since the financial crisis. The IPO market is unlikely to improve before the end of the year, Evans said.
A Chinese buyout firm extended the closing date of its London IPO to Oct. 31, a delay of about a month, in a sign that conditions remain tough. Welkin China Private Equity Ltd. is looking for up to $300 million in the share sale, making it the second biggest UK listing.
One potential boost for London would be the listing of UK chip designer Arm Ltd., which its owner SoftBank Group Corp. is pursuing in New York. The Financial Times reported this month that the UK government plans to push for talks with SoftBank to encourage the Japanese conglomerate to list Arm in London.
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