London stock market drops out of the top 20 destinations for IPOs
LONDON has today fallen out of the top 20 global IPO destinations of 2024, having raised only as much money as Kazakhstan’s stock market, the Standard can reveal.
Data compiled by Mergermarket for the Evening Standard shows London languishing in joint-20th position for money raised by new floats in the first four months of the year. The London stock market has had only one float, raising just $119 million (£95 million).
That puts it behind much smaller exchanges such as Istanbul, Athens and Oslo.
But with Charlotte Tilbury owner Puig selling its shares in Madrid today, London has dropped another spot in the global leaderboard.
The lone IPO of 2024 was Air Astana’s joint float between London and the Kazakhstan Stock Exchange. That means London’s stock market has raised exactly as much as the 30-yearold exchange in the world’s 54th-largest economy. Dan Coatsworth, investment analyst at AJ Bell, says many companies are hoping to IPO soon, but are waiting until after the election. But given the time it takes to list, the recovery may not happen “until 2025 at the earliest”.
Coatsworth said: “The London Stock Exchange already has a problem on its hands regarding the big IPO freeze and it won’t want to wait until next year for a solution.”
That freeze comes as a number of top quoted firms are fleeing the City — some being taken over and others moving their listings to the US — with the lack of floats meaning no new arrivals are replacing the leavers. Charles Hall, head of research at Peel Hunt, says both trends have the same cause: a lack of demand for London shares.
He said: “This should be of clear concern to government and policy makers as capital markets play a vital role in the UK economy.”
Some fear the London Stock Exchange’s owner, LSEG, doesn’t have enough of a financial incentive to fix the problem. LSEG made more than £7 billion in gross profit last year, but only 3% of that came from the exchange.
An LSEG spokesperson said: “London Stock Exchange is an important part of the Group and it is wrong to suggest otherwise. All entities across the Group benefit from our diversified business model and strong balance sheet.”
The drought also appears to be creating a vicious cycle. Senior execs at two of London’s top fintechs, Zilch and Zopa, which were both tipped as 2024 IPO candidates, recently told the Standard that they wanted to see floats pick back up before they list here.
Hopes for an IPO revival in 2024 lie with Chinese online retail giant Shein, which is considering the UK for its long-awaited $50 billion float as rising US-China tensions make a US listing less appealing. But having not yet announced a destination, that IPO would still be months away at the earliest. And the business may not be welcomed by all, having come under fire for its labour practices and environmental impact.