London’s struggling IPO market needs streamlined regulations to lure start-ups, global issuers, says broker
- London should streamline its regulatory regime to attract more start-ups and foreign issuers, says Numis Corp
- London has been struggling to retain its status as a premier destination for large, global companies ever since Brexit
“Encouraging home-grown start-ups to flourish and eventually choose London over other public markets for a listing requires a simpler and more flexible regulatory regime,” said James Taylor, Numis’s investment banking head. Simpler rules would also attract international issuers, he said.
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The reforms have yet to pay off and many promising British start-ups are bypassing London to list in other markets, mainly the US. IPO proceeds in the UK only tally US$1.6 billion in 2022, its worst showing since 2009 and trailing other European venues like Milan and Zurich, data compiled by Bloomberg show.
While IPOs globally have stalled in the face of economic challenges from sky-high inflation to the war in Ukraine, London has been struggling to retain its status as a premier destination for large, global companies ever since Brexit. High-profile tech listings in 2021 like Deliveroo Plc and Wise Plc turned into embarrassing flops, adding to the pain.
Still, some green shoots are starting to come through. Two investment trusts kicked off London IPOs Monday morning, braving a test of investor appetite.
“Despite this year’s quieter IPO markets, London still retains its status as the deepest capital pool in Europe,” Taylor said. “Change is needed, however, to maintain this status in the face of increasing competition from other global exchanges.”
