The UK IPO market has had the leanest quarter for more than 10 years, according to figures from KPMG...
The UK IPO market has had the leanest quarter for more than 10 years, according to figures from KPMG Corporate Finance.
The money raised in the fourth quarter of 2001 was down 93% on the same period in 2000 and, while 78 companies were formed last year, only nine non-investment vehicle trading companies joined the Official List of the London Stock Exchange in 2001. This compares with 138 new entrants in 2000, 72 of which were trading companies.
The slowdown in new market entrants was starkly illustrated in the last quarter of 2001 in which only one trading company joined the market and the total money raised was £184m compared to £2.6bn raised in the equivalent period of 2000.
While funds raised for the whole year were only down 7% to £9.9bn, two-thirds of this year's figure came from the flotation of two companies ' Friends Provident and Orange, at £2.28bn and £3.99bn respectively. The bulk of activity for the year was made up of the launch of investment trusts and VCT launches, with 48 of the 78 IPOs in the year being investment vehicles.
Although the figures for last year were disappointing, Neil Austin, head of new issues at KPMG Corporate, argued that the outlook for next year was already looking more positive.
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