In a world full of reasons to be gloomy, perhaps we might make a few concessions to optimism, at least today.
The economy is going the right way, up, and faster than most commentators expected.
Taxes are going slowly down, so is inflation, which means interest rates should follow soon-ish. We can leave the City pointy heads to argue about whether that will be in June or perhaps not till September.
Moreover, the London stock market, moribund for so long, is finally showing some signs of life.
One sour point remains the state of the IPO market – the new floats on the stock market that elude London because CEOs think they can get better values in New York, with reason.
Even there, if you delve into the weeds there are glimmers of hope.
There have been just five IPOs in London this year and they are up nearly 27% on average, compared to 10% for the FTSE 250.
European Green Transition and Helix Exploration in particular have been done well. They aren’t huge, but investors have seen and found value.
Perhaps the lesson here is that all of these companies were happy to take the value they could upon float, rather than search out the highest possible rating.
That’s how it used to be done. A company would float at a bit beneath it’s true market value, allowing a nice little bump for new investors on day one and week one.
That way, there was far less chance of a flag waving float followed by a flop that made everyone nervous.
It would be nice if London could land a huge tech float at a tasty valuation. Until then, perhaps the lesson for the smaller fry coming to the market is a simple one: don’t be so greedy up front.
If you really are a good business, you will be seen as such in time – forget, mostly, about the value the bankers give you on day one.
