Number of flotations falls in 2018

STOCK MARKET flotations and shares sales in the London market have fallen 18 per cent this year, according to financial information group Dealogic.

It said that 490 companies either held an initial public offering (IPO) or sold new shares to investors during the course of the year, compared to 593 last year. It is the first time the number of deals has fallen since 2015.

Dealogic added that the aggregate value of IPOs and company share sales on the LSE for the year to date is £29.2 billion, its lowest level since 2012 when just £13.9 billion worth of deals were done. The value of shares-based deals last year was £34.6 billion.

Aston Martin, the luxury car marque beloved by James Bond, was the biggest flotation of the year, but also one of the most disappointing. Prior to its debut in October, the firm had expected to be valued at £5 billion. When the shares started trading, Aston Martin was initially worth £3.9 billion but is now valued at £2.7 billion.

Another disappointing IPO was financial technology group Funding Circle, one of the new breed of lenders that is challenging the big banks in the small business loans market. Since its flotation in September, shares in the company have plummeted 44 per cent to finish on Friday at 246.3p, taking its valuation down to £899 million.

While the appetite for shares-based deals is faltering, Dialogic’s data shows that companies are increasingly turning to the debt market. The firm said that this year, 751 companies did debt market deals, such as issuing bonds or IOUs to investors, an increase of 9.5 per cent. The combined value of those debt deals rose £4.7 billion to £272.9 billion.

Globally, the number of shares-based deals fell 16.7 per cent, as equity markets were rattled by the prospect of a trade war between the US and China, rising interest rates in America, concerns about the health of the technology sector, Brexit uncertainty and over cooling growth. The value of those deals was down 21.2 per cent to £534.5 billion.