UK plans to leave the EU have done nothing to prevent London from reclaiming its status as Europe’s most popular initial public offering (IPO) location, according to a new report from PwC.
In its latest, quarterly round-up of European IPO activity, the auditor found that in the first quarter of the year:
Among London’s 20 IPOs, the financial sector accounted for 87% of the proceeds, with BioPharma Credit raising £610m (€705m) and Ocelot Partners taking in £342m (€395m).
Those sums helped London to retake its crown from NASDAQ Nordic as Europe’s most active exchange, building momentum that PwC says will stand it in good stead for the rest of the year.
PwC noted that, despite Brexit, “supportive market conditions” across Europe had buoyed the region’s IPO scene, with a general improvement in political stability supporting the recent uptick in Spanish activity.
Indeed, the auditor points out, Neinor Homes’ offer was oversubscribed in one day, “which, for a Spanish property company, would have been unthinkable until recently”.
BME’s forthcoming IPOs for Gestamp and Unicaja look set to continue this trend into Q2 2017, the research says.
According to PwC capital markets director Lucy Tarleton, “While Q1 2016 was affected by political uncertainty and concerns over global economic growth, conditions this year have been more favourable for IPOs.
“Despite the lead-up to the UK invoking Article 50 and the Dutch elections this quarter, the VSTOXX50 index – measuring market volatility – has remained low throughout the period.
“This, combined with the low interest rate environment – and investors being keen to seek out and back IPOs with well-supported compelling equity stories – means that a healthy pipeline of IPOs is beginning to emerge across the European continent.”
Her colleague, capital markets partner Mark Hughes, added: “Q1 2017 numbers combined with a strong, medium-term pipeline of both domestic and foreign issuers, suggest that London is well placed to continue as Europe’s premier exchange as the UK negotiates its exit from the EU.
“Issuers will continue to be attracted to London by the liquidity of the financial markets, the depth and breadth of the investor base and the regulatory and business framework.”