{"id":94725,"date":"2025-09-30T13:10:14","date_gmt":"2025-09-30T13:10:14","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/94725\/"},"modified":"2025-09-30T13:10:14","modified_gmt":"2025-09-30T13:10:14","slug":"london-drops-out-of-top-20-ipo-markets-after-falling-behind-mexico","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/94725\/","title":{"rendered":"London drops out of top 20 IPO markets after falling behind Mexico"},"content":{"rendered":"

(Sept 30): London has slipped out of the world\u2019s top 20 initial public offering markets as the third quarter ends, overtaken by Mexico and Singapore in a fresh blow to its standing as a global finance hub.<\/p>\n

The UK exchange has slipped three places to 23rd in a Bloomberg ranking of the world\u2019s busiest IPO destinations, placing it behind the frontier market of Oman. Volume this year dropped 69% to US$248 million (RM1 billion), the weakest haul in more than 35 years.<\/p>\n

This year\u2019s largest London IPO \u2014 an April offering from accountancy MHA Plc \u2014 raised \u00a398 million (US$132 million). No deals have involved a major Wall Street bank; they were instead arranged by small local outfits like Cavendish Plc and Singer Capital Markets. The third-quarter picture is even starker with just US$42 million of deal volume, down 85% from the same period last year, according to data compiled by Bloomberg.<\/p>\n

London\u2019s centuries-old role as an international financial center has been eroded by competition from European rivals and rising hubs in Asia and the Middle East. Lower valuations have fueled an exodus of companies to private buyers or New York\u2019s deeper capital markets. That\u2019s diminished London\u2019s importance from the days when it was regularly one of the world\u2019s biggest IPO players.<\/p>\n

\u201cWhen valuations are low, private owners hesitate to IPO at a discount, while listed firms become takeover targets instead,\u201d said Leonard Keller, a portfolio manager at Berenberg. \u201cThe UK has interesting companies, but London\u2019s valuation discount can be an entry point for private equity.\u201d<\/p>\n

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The numbers show how swiftly London\u2019s fortunes have fallen over less than two decades. In 2006, fundraising peaked at an all-time high of US$51 billion with listings from Scottish insurance giant Standard Life Plc, department store owner Debenhams Plc and Russian oil major Rosneft. This year\u2019s total is down 99% from the same period in 2006.<\/p>\n

As recently as 2013, UK IPOs accounted for more than half of the European fundraising total. That share has dwindled to 3% this year, according to data compiled by Bloomberg.<\/p>\n

Other markets are in the ascendancy. Singapore jumped to ninth place this year with US$1.44 billion raised, driven by property trust listings. Mexico ranks as the 19th-busiest listing venue this year with US$460 million of deals, nearly double London\u2019s volume. Both recorded little or no activity last year.<\/p>\n

London IPO volumes remain slightly higher than Norway, the West African regional bourse known as BRVM, and Croatia.<\/p>\n

Barney Hussey-Yeo, chief executive officer of British fintech start-up Cleo AI Ltd, said the lack of London IPOs will have a ripple effect leading to less talent, tax revenue and wealth creation in the UK.<\/p>\n

\u201cWhen you speak to the successful founders in Europe, they\u2019d tell you that the London Stock Exchange is not fit for purpose,\u201d Hussey-Yeo said.<\/p>\n

Losing out<\/p>\n

As fewer large companies go public in Europe, the region\u2019s stock exchanges are fighting harder to win the biggest listings. London was competing with Stockholm, Amsterdam and Zurich to host Hellman & Friedman\u2019s IPO of alarm company Verisure Plc, which is targeting to raise more than \u20ac3 billion. It ultimately lost out to the Swedish capital.<\/p>\n

Consumer goods giant Unilever Plc selected Amsterdam as the main listing venue for the spinoff of its Magnum ice cream unit, with London and New York getting secondary listings. Defence manufacturer Czechoslovak Group AS, aiming for a valuation of \u20ac30 billion or more in an IPO next year, was considering London before opting for Amsterdam due to its friendlier regulatory regime, according to people familiar with the matter. A representative for CSG declined to comment.<\/p>\n

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The pool of UK-listed firms continues to decline as private equity funds snap up undervalued companies. KKR & Co has made takeover approaches to at least three companies on the London market this year. Bain Capital, Blackstone Inc, Brookfield, ICG Plc, Macquarie Asset Management, Permira, Stonepeak Partners and Warburg Pincus have also pursued deals in recent months.<\/p>\n

A sense of just how undervalued some stocks have become emerged when a bidding war broke out for Spectris Plc, a maker of precision testing equipment. KKR ended up beating out Advent and agreed to buy Spectris for \u00a34.2 billion \u2014 more than double its valuation before the approach.<\/p>\n

\u201cPrivate equity is taking companies off the market, but they\u2019re not then bringing them back when they work their magic on them,\u201d said Rupert Soames, a City of London grandee who now chairs the Confederation of British Industry. \u201cThe fact is, there\u2019s been a net loss.\u201d<\/p>\n

UK authorities have rolled out reforms to reinvigorate the public markets. Those include relaxing rules around dual-class share structures, making it easier to raise additional funds and loosening guidance around executive pay. FTSE Russell, which compiles the blue chip FTSE 100 index, last week started allowing stocks not trading in British pounds to be included in UK indexes and lowered the bar for firms to fast-track into the indexes after IPOs.<\/p>\n

London Stock Exchange CEO Julia Hoggett has pledged to boost London\u2019s junior AIM market and is pushing a new venue for investors to trade shares of private companies. She\u2019s scheduled to speak on Oct 1 at Bloomberg\u2019s Women, Money & Power event in the UK capital.<\/p>\n

\u2018Avoid the UK\u2019<\/p>\n

Companies are shifting away from London. Wise Plc plans to move the money-transfer company\u2019s primary listing to New York to tap deeper pools of liquidity. Top British drugmaker AstraZeneca Plc said this week it will directly list its regular shares on the New York Stock Exchange instead of American depositary receipts, upgrading a listing where it already sees strong trading activity.<\/p>\n

\u201cMomentum is an important factor, and the commentary \u2014 certainly from some larger UK-listed companies \u2014 is the view that there are better equity valuations to be had in the US,\u201d said James Congdon, who runs the Quest research division at Canaccord Genuity Group Inc. \u201cSadly, that sends the message that it may be best to avoid the UK.\u201d<\/p>\n

The wider UK market malaise has led stockbrokers including Peel Hunt Ltd and Zeus Capital Ltd to cut staff. Peel Hunt said in June that its loss widened in the latest financial year as it grappled with restructuring costs and a dearth of London IPOs. It\u2019s since adopted a more hopeful tone, saying it\u2019s tracking ahead of expectations thanks to M&A work and \u201cnascent\u201d ECM activity.<\/p>\n

London\u2019s IPO market will see some more deals before the end of the year. The Beauty Tech Group Plc, maker of Tria Laser hair removal devices, has been taking orders for an IPO that could value it at up to \u00a3320 million. Canned tuna producer Princes Ltd has also been considering going public in the UK this autumn, Bloomberg News has reported. Fermi Inc, an energy REIT co-founded by former US politician Rick Perry, is planning a secondary listing in London after its Nasdaq IPO.<\/p>\n

A spokesperson for the LSE said it\u2019s encouraged by the pipeline of companies looking to IPO in the coming months. They added that IPOs aren\u2019t the only indicator of the health of the UK capital markets, with activity in follow-on offerings remaining strong.<\/p>\n

The bigger boost could come next year. Hg-backed software firm Visma, which was last valued at \u20ac19 billion, has provisionally picked London for a 2026 float that could rank as the market\u2019s biggest IPO in years, Bloomberg News has reported. British travel agent Loveholidays and Uzbek gold miner Navoi Mining & Metallurgical Co are also planning London listings, people with knowledge of the matter have said.<\/p>\n

But for now, rival European venues have stronger pipelines of upcoming listings, and the US remains the preferred IPO venue due to its higher valuations and more receptive investor base, according to Valeriya Vitkova, senior lecturer at the Bayes Business School in London.<\/p>\n

The UK stamp duty on stock trades and British funds\u2019 low allocation to local equities are among factors dragging down the market, the CBI\u2019s Soames said. Still, he expressed confidence that rule changes could help turn things around.<\/p>\n

\u201cThere is huge momentum now about getting reform to regulation,\u201d Soames said. \u201cLondon is still preeminent, so don\u2019t give up hope.\u201d<\/p>\n

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