Today’s figures showing a dearth of new London stock market floats are plainly concerning.
Initial public offerings are deemed to be the heartbeat of the City, a sign that there’s action in the wider economy and that London retains its status as a reliable place for entrepreneurs seeking capital.
But some context here: for a start floats are down nearly everywhere. EY’s own figures show that global IPO volumes fell 45% year-on-year in 2022 (and deal values by 61%).
So while there’s irritation that the City’s listing reforms aren’t being pushed through fast enough, some of the concern is just Brits doing what we do best — talking ourselves down.
And we have short memories. Post-pandemic, floats were off the charts as cool-sounding businesses such as Darktrace and The Hut Group raised billions.
Mathew Moulding, founder of THG, later said he regretted taking his business public in London. So do we all chief — the stock is now 65p compared with an offer price of 500p.
In fact, tech floats raised £6.6 billion in 2021, most from investors now sitting on very burnt fingers and vowing that they won’t get fooled again. New floats aren’t always good.
If you look beneath the bonnet of the City, at private equity, at the insurance market, at law firms, they are all doing just fine.
Daily moves in the market and fresh stock market floats are sexy, they catch the eye. They are just a small part of what the Square Mile is about, and in the long run a bit of caution here and there always turns out to have been a good thing.
