Business

UK domestic IPOs to rise amid ‘poor’ performances in US

European companies have reportedly suffered average depreciations of up to 47%, which is 28% higher than if they were to list domestically

The UK is expecting an upturn of homegrown companies listing domestically as market fluctuations have created uncertainty for investors around the globe, according to Theta Global Advisors.

The firm said indexes like the S&P 500 are excluding foreign companies from their listings, and US focused investors “tend to sell-off non-essential foreign stocks first”.

Consequently, European companies (including the UK) have suffered average depreciations of up to 47%, which is 28% higher than if they were to list domestically, according to Dealogic.

Chris Biggs, CEO and founder of Theta Global Advisors, said that opportunities still exist in the UK for companies who are in a prime position to take advantage of them, despite the IPO market not sitting in a perfect position.

He added that the rising interest rates have “severely dented” appetite, having a “significant” impact on the amount of IPOs this year and “hindering” companies’ plans.

Biggs said: “Rising interest rates have caused a significant shift in the UK IPO market. Moves must now be made to counter growing inflation and the recent rate rises are a significant step.

“With major companies continuing with their public offering plans throughout the next quarter, the market looks set to rebound and provide several exciting opportunities for investors throughout the rest of 2022.”

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