London stock market sees ‘subdued’ year so far, EY finds

The London stock market has witnessed a subdued first half of the year, with 18 issuers raising only £593m as IPO performance was hit by high inflation, rising interest rates and geopolitical pressures, EY has found. 

While this was in line with H1 2022, when £594m was raised from 26 issuers, EY said the figure is “well below” the record levels of activity seen in H1 2021, when 47 IPOs in London raised £9.4bn.

In the second quarter of 2023, the UK main market listed 10 IPOs which raised £497m in total, whilst the Alternative Investment Market (AIM) saw three admissions raising £15.5m. 

The largest main market IPO in the period was Admiral Acquisition Ltd which raised £439.8m, and the largest AIM admission was Fadel Partners Inc, which raised £7.6m.

Scott McCubbin, EY UKI IPO leader, said: “The London IPO market continues to experience challenges with macroeconomic and geopolitical pressures having an adverse impact on businesses looking to list in the UK. These headwinds will need to abate to enable real growth, however with some larger IPOs expected in 2024 and a strong pipeline, the long-term outlook looks more positive. 

“The upcoming reviews by the FCA and Treasury may also provide some impetus to the UK markets and help boost the UK’s appeal as a global listing destination, however it’s vital that a robust package of measures is implemented to tackle the fundamental issues affecting London’s capital markets.”

He added: “The FCA’s proposals to simplify the UK listings regime should have a positive impact if coordinated with wider reforms, however the proposals will also remove some key, post-listing, investor protections for which the London stock market is well-known for. This increase in investor risk could reduce the appeal of the UK market to investors so it’s imperative a balanced approach is considered to make London a more attractive destination to list.”