The City’s IPO prospects now stand on a “level playing field” with other major venues, despite a battle to keep the next generation of listing talent in the UK, a top market analyst has said.
Speaking at City & Financial Global’s Capital Markets Summit, Charles Hall, head of research at Peel Hunt, said: “There are a lot of companies that do want to IPO… we’ve got a list of 20 to 25 companies that would be brilliant IPOs for the UK.
“The challenge for us is keeping them in the UK.”
Hall’s remarks come as speculation ramps up that Astrazeneca – the market’s most valuable company – could hand a fatal blow to the stock exchange.
The pharma giant – with a market cap of over £196bn – is speculated to be eying the US as a main market, and recently upgraded its listing on the Nasdaq to one on the New York Stock Exchange in a bid to give it “the flexibility to access the broadest possible available pool of capital.”
Hall said: “If we lose Astrazeneca, that would be a disaster… if they go to the states, other companies will follow.”
He said further reforms to boost capital in the UK must come “quickly” or else “we risk losing [fintech unicorns] Revolut, Zilch, Clearscore.
“They are terrific companies and that’s the thing we have got to change – we have got to make sure capital stays in.”
Eyes on pensions for boosted capital
Still, Hall did note recent regulatory changes had put the UK on a “level playing field” when it came to listings, but added the London market faced issues in enthusiasm and access to capital.
“We are world experts at exporting our capital – it is a fundamental flaw in the British system,” he said.
Hall pointed to pension funds, where he said it was “extraordinary” the amount that was being sent abroad.
“We are sending over £50bn a year overseas, it is no wonder our domestic market is suffering.”
Hall’s calls come as the London Stock Exchange offers a glimmer of hope in the final quarter with recent listings from Texas-based energy developer Fermi and Cheshire-based Beauty Tech Group.
Also in the pipeline is Branston baked bean maker Princes, as well as specialist lender Shawbrook – with the latter hoping to be valued at £2bn marking the City market’s largest IPO to date.