London lags Copenhagen as UK Iistings fail to recover

With just one working day left of 2016, IPOs on the London Stock Exchange during the year total $ 5.3 billion, according to data firm Dealogic. That leaves London’s main market behind Frankfurt Prime, which hosted $ 5.7 billion of IPOs, and Copenhagen, home to $ 5.9 billion of floats. AIM, London’s junior market, ranks seventh with listings worth $ 1.4 billion.

Dealogic’s ranking does not include an IPO’s non-deal value.

The last year in which London’s main market failed to top the table was 2009, when it ranked fourth behind Warsaw in top place and then Amsterdam and Paris.

London topped the rankings by value of floats in 2016 through to the end of May. In early June it slipped to third place, nudged from the top by the Dutch floats of ASR Nederland and Basic Fit and the $ 3 billion Copenhagen IPO of Dong Energy, at that point the largest European IPO of the year, according to Dealogic.

Investment bankers had hoped that a string of listings later in the year, after the uncertainty surrounding the UK’s referendum on EU membership had cleared, could lift London. Instead, several big ticket deals were pulled due to adverse market conditions, including the planned float of software company Misys, which had hoped to raise up to £500 million in the final months of the year, as well as the listings of car parts manufacturer TI Fluid Systems and Pure Gym Group.

In the wider European market, meanwhile, the $ 2.3 billion listing of Nordic payment firm Nets proved a disappointment. The IPO priced at 150 Danish kroner per share in late September, but a month later had fallen to DKK127.60.

The head of equity capital markets at one of London’s biggest investment banks told FN in late October: “Make no mistake, [Nets] has been a real turning point”, while another said that “issuers [in September] were given the benefit of the doubt, but that’s shifted to a burden of proof-type market, and Nets was the catalyst of that”.

Ed Bibko, the global head of equity capital markets at Baker & McKenzie, said: “The good news is that there aren’t the sort of big, planned for shocks in 2017 that have marked the last two years (remember 2015 had the Greek elections and the Scottish referendum). The pipeline has been refreshed and we are seeing a number of companies preparing to IPO in the spring.”

Across Europe, the value of IPOs stands at about $ 32.5 billion, roughly half the $ 66.2 billion priced in 2015. The year’s largest deal came from Germany, where RWE spun out its renewable energy business Innogy in a $ 5.2 billion float in October.

UPDATE: This story has been updated to note that the IPO value on which Dealogic’s exchange ranking is based does not reflect non-deal values. It has also corrected the currency Nets’ IPO was priced in to Danish krone from Norwegian krone

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