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The number and value of companies listing on London’s IPO market has fallen to its lowest level in four years. In a difficult year for companies listing on the London Stock Exchange, a top spread betting broker is one of just 43 companies to list in the first nine months of the year.
Shares in CMC, one of the best financial spread betting brokers in the UK, floated on the London Stock Exchange at 240p per share back in February. The shares fell on initial trading, and despite some initial rises had fallen to around 180p in October 2016.
The spread-betting company – one of the largest forex brokers in the UK – was founded by City of London tycoon Peter Cruddas who owns 90 per cent of the company.
Most of the IPOs that have taken place in 2016 have been in the financial sector. These include Metro Bank, Clydesdale and Yorkshire Banking Group and CMC Markets, the top CFD broker.
Experts blame the uncertainty surrounding the Brexit vote as a reason for the slump in new listings. At the time CMC Markets floated, the Financial Times reported that it was likely to be watched closely as an ‘indication of the health of the IPO market’.
Since the CMC launch, a number of major IPOs have been pulled. These include British software giant Misys, food distributor Brakes Group, Pure Gym and doughnut maker Krispy Kreme.
Just 13 companies have launched on the main market since the start of the year and 43 overall – once the 30 listed on AIM have been added. In total just eleven IPOs have taken place since the EU referendum, with only five on the main market in the last three months.
Colin Hughes of Henderson, said: “The chilling effect of the Brexit vote noticeably cooled companies’ enthusiasm to list on the stock market, and we have yet to see IPO activity reheat despite market conditions settling somewhat.
“It’s not necessarily bad for investors in the short term – it means it’s a buyers’ market: new listings have to compete for investor cash and that means keener prices,” he added.
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