A total of 30 public listings of companies in the third quarter of 2017 made London the busiest market for flotations across Europe, the Middle East, India and Africa.
A new report out today from accountancy giant EY said the UK initial public offerings (IPOs) raised a total of £2.9 billion, and suggested 2007 would be the busiest year for floats since 2007 – the year before the financial crash.
Scotland could also be poised for a rise in IPO activity following the success of the £200 million flotation in the summer of Scottish retailer Quiz Clothing, the report said.
Mike Timmins, EY Partner and IPO Leader in Scotland, said: “IPO activity across the UK market in the third quarter experienced a significant uptick.
“In Scotland, the IPO of Quiz Clothing, which is trading well above its admission price, has signalled renewed confidence and could act as a stimulus for other Scottish headquartered businesses to follow suit.”
The main UK stock market saw 14 floats raising £2bn, while 16 admissions on the smaller AIM (Alternative Investments Market) raised £916m, said the latest EY IPO Eyereport.
It said the financial sector continued to dominate listings in the three months to end-September, with 16 new IPOs, “confirming London’s continued presence as a global financial hub”.
The report added that there had been a dozen cross-border IPOs, “pointing to global investor confidence returning in the UK”.
The cross-border deals accounted for a quarter of UK flotations, and represented more than half (56 per cent) of the total money raised.
Investor interest had been piqued “by the quality of the FTSE performance against the low value of the pound, making UK investments of particular interest to international investors”, the report said.
EY also said that a number of businesses brought their planned flotations forward “in order to take advantage of the current stable regulatory environment”.
Timmins added: “Overall, we expect that Q4 2017 will be the most active quarter of the year with a number of Scottish companies also close to announcing their intention to float.
“Across the UK the pipeline is looking strong for AIM and small Main Market listings, both areas that have been largely unaffected by events in the wider economy.
“However, until the pound stabilises and there is greater certainty and clarity regarding the process and terms of the UK’s withdrawal from the EU, we will not see a full recovery of the UK IPO market, particularly of local listings on the main market.”
Even so, he said that London was set to mirror global IPO activity, which in 2017 is on course to be the busiest year since 2007 with an estimated 1,600 to 1,700 IPOs raising US$190bn to US$200bn as a result of rallying markets, low volatility and strengthening investor sentiment.