Global equities climbed to a record high on Wednesday, aided by yet another day in the green for the FTSE 100 that has sparked a rare bout of optimism among City grandees that life could be breathed into the Square Mile’s beleaguered IPO market this autumn.
Stock markets in London, New York and across Europe all rallied to their combined record on hopes that the Federal Reserve would cut interest rates at its next meeting, after US inflation came in cooler than expected on Tuesday.
The session took the FTSE 100 within a whisper of its July all-time high, in further evidence of the summer bull run enjoyed by the index, which is now up 10 per cent this year, and nearly 20 per cent since the lows it struck after ‘Liberation Day’ sent markets spiralling.
The rally has triggered a rare bout of optimism among influential City figures, who are predicting London’s listings-starved bourse may enjoy a flurry of IPOs over the autumn.
“The IPO jungle drums are starting to beat,” Charles Hall, head of research at Peel Hunt, told City AM, adding: ” A few successful IPOs would change the momentum… the levers are clear, they just need to be pulled.”
Mark Austin, partner at City law firm Latham & Watkins, added: “The UK market is now match fit in regulatory terms when compared to any other European jurisdiction and in many ways the US too.
“Now we need everyone to keep changing the culture… Positive narrative creates positive perception, creates positive reality. More Tigger, enough Eeyore.”
London’s financial officials have been locked in a high-profile battle to attract promising companies to list in the UK capital, with delistings and private equity buyouts far outweighing the number of IPOs over successive years.
This year alone, UK markets have lost several cherished constituents and missed out on a host of IPO contenders. Shareholders of the fintech darling Wise approved its plans to switch its primary listing to the US in July, while Unilever’s ice cream business, fast-fashion brand Shein, and Glencore-backed Cobalt have all snubbed London in favour of other stock markets.
But there are early signs London’s unenviable run may have reached its nadir, with a slew of new listing candidates aided by other scraps of good news for the capital.
“There is a sneaking suspicion among the City advisers I speak to that this autumn could be a good one.” James Ashton, chief executive of the Quoted Companies Alliance, told City AM. “It won’t take much to light the IPO touchpaper. And investors that are taking a fresh look at our small and midcaps are already finding incredible value.”
Within the last week, commodities juggernaut Glencore has shelved its plans to move to New York and London-listed landlord Assura has turned down an approach from US buyout behemoth KKR in favour of an offer from FTSE 100 real estate investment trust, PHP.
Meanwhile fintech lender Shawbrook, food staples giant New Princes, and £15bn software firm Visma are all girding their loins for IPOs this year, ushering in a potential return of animal spirits to the Square Mile.
“With global markets in bullish territory, the FTSE hitting all-time highs, and some genuinely exciting IPOs on the horizon, there’s real cause for optimism in UK markets as we head into the autumn,” said Michael Healy, UK managing director of IG.
“But let’s be clear, that’s the short-term picture. The longer-term trend is one of decline, with far more companies exiting the UK market than joining. Without radical action, what was once the most revered stock market in the world risks sliding into irrelevance.”