IPO Eye Q3 2016
UK IPO market in the starting blocks
The unexpected EU referendum result has compounded the slow first half of the year in the UK, which saw many businesses put listing plans on hold. The first nine months of 2016 saw a total of 46 IPOs on the London Main Market and AIM, raising a total of £3.1bn – a 47% decrease in proceeds and 11% in volume compared with the same period in 2015.
However, the summer months are a traditionally quiet period for the UK’s IPO market; a comparison of 3Q16 to 3Q15 reveals little change.
There were six IPOs in Q3, the same number as in 3Q15, but capital raised was up 18%. Newly listed stocks in 2016 have outperformed veteran assets, which are currently trading an average of 32% above list price, with only one stock with a very small negative growth. There was only one PE backed IPO.
Looking ahead, higher valuations and lower volatility could see IPO activity pick up. While a return to 2014’s record levels may be a stretch, activity in 2017 could surpass 2015.