City investment bank Peel Hunt has flagged a slowdown in UK capital markets activity as investors nervously await the results of the Budget and US election.
However, despite the warning, the London-listed firm said on Tuesday revenue was set to come in higher during the first half of its 2025 financial year.
It expected revenue to be £53.3m in the first half, up around 25 per cent from £42.7m during the same period a year prior.
“Our performance reflects a more positive macroeconomic backdrop, together with success in completing M&A financial advisory mandates for our clients during the period,” Peel Hunt said.
Peel Hunt, which helps firms prepare for IPOs, highlighted “improved performance” in its core equity capital markets business.
Peel Hunt is anticipating a “broader re-opening” of London’s IPO market next year after a torrid 2023 that saw just 23 firms float in the capital and precious few signs of improvement in 2024.
Peel Hunt said that while equity capital markets activity “remained muted”, it still helped several clients execute equity fundraises and block trades.
The firm said “market activity has slowed again in recent weeks” ahead of key political events on both sides of the Atlantic. This led to slower trading volumes in its execution services business.
Financial markets are bracing for potential shake-ups in public policy following October’s Budget and November’s presidential vote. Britain’s Labour party is widely expected to hike taxes to address an alleged £22bn “black hole” in the public finances.
Peel Hunt added on Tuesday that it remained “well positioned across all parts of our business to take advantage of increased activity when market confidence returns”.
The firm now acts for four FTSE 100 companies and 42 FTSE 250 companies, bringing the average market capitalisation of its retained corporate clients to roughly £860m, up from around £620m a year ago.