Stock market listings cooled last year amid Brexit uncertainty and activity is likely to remain subdued in 2019, a report today reveals.
Releasing its latest IPO Eye report, professional services giant EY said 2018 had seen a total of 79 initial public offerings (IPOs) in London – 44 on the main market and 35 on the junior Alternative Investment Market (Aim) – raising some £9.5 billion. This compares with 95 IPOs listing in 2017 raising £12.4bn – 51 on the main market and 44 on Aim.
Aston Martin was the largest IPO last year, raising about £1.1bn of capital and three of the top four IPOs by capital raised in 2018 were backed by private equity.
Mike Timmins, EY’s IPO leader in Scotland, said: “While 2018 witnessed a fall in IPO activity, the UK market showed resilience to volatility and geo-political uncertainty by remaining open with listings still going through in December.
“Consequently, the final quarter produced a stronger finish to the year than previously expected with the highest number of main market listings in four years which could be an indication that issuers had brought forward IPOs from 2019. This was a welcome conclusion to the year but not indicative of an uptick in the market in early 2019.
“We expect Q1 2019 to be more subdued than normal as companies await the outcome of Brexit negotiations meaning activity is likely to be weighted towards the second half of the year.
“Activity may be further tempered by the slowdown in global growth that is beginning to impact markets and the wider economic outlook for 2019.
“We also expect pricing pressure to increase as cautious investors look to drive a hard bargain so issuers will need to have robust equity stories and be well prepared to enable them to transact.”