The number of initial public offerings (IPOs) on the London Stock Exchange (LSE) saw a significant decline in the first half of this year, posing a challenge for efforts to revive the City’s stock market. According to a report by EY, the LSE experienced a nearly 30% drop in listings between January and June compared to the same period last year, while the funds raised remained stagnant at £593 million.
This data underscores the ongoing struggles faced by the LSE, especially in light of recent moves by several FTSE 100 companies to shift their listings to New York. Just last month, WE Soda, the world’s largest producer of natural soda-ash, abandoned its £6 billion London listing due to “extreme investor caution.”
Scott McCubbin, head of IPOs at EY, acknowledged the challenges faced by the London IPO market, attributing them to macroeconomic and geopolitical pressures impacting businesses seeking to list in the UK. However, McCubbin remains optimistic about the long-term outlook, citing the expectation of larger IPOs in 2024 and a strong pipeline.
In an effort to bolster the struggling market, the Financial Conduct Authority (FCA) has proposed changes to its listing rules. The regulator is considering replacing the current premium and standard system with a “single segment” regime featuring less burdensome regulations. This move, if implemented, would mark one of the most significant overhauls of London’s stock market rules since the 1980s and enable a wider range of companies to be included in the influential FTSE indexes.
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