Between July and September 2024, the London Stock Exchange saw just two new companies list on the main market and AIM, collectively raising £64.8m.
Investment fund, Aberforth Geared Value & Income Trust plc, listed on the main market and raised £14.8m, whilst Rosebank Industries Plc raised £50m listing on the AIM market.
Year-on-year (YOY), proceeds raised in Q3 2024 are down 82% on the £359.8m raised across five listings in Q3 2023.
Year-to-date, there have been 10 listings on the London stock market which have raised £584.6m, down 47% by proceeds compared to the same period in 2023.
Scott McCubbin, EY UKI IPO Leader, said, “The third quarter is typically a slow period for listings and while the UK general election offered some clarity on regulatory and policy matters, many businesses considering IPOs are still holding off. These firms are awaiting potential reductions in interest rates as inflation stabilises, as well as the outcome of the Chancellor’s Autumn Budget and the US election in November.”
“During the quarter we also saw measures to simplify the UK listing regime take effect aimed at making London more attractive for businesses seeking to go public. These reforms have been largely welcomed but it remains to be seen how quickly they will have a material impact on listing activity this year.
“As we enter the final quarter of 2024, we anticipate some pick-up in IPO activity, but the timing of these could slip into early 2025. Continued geopolitical instability in Ukraine and now the Middle East adds to the timing uncertainty but is supported by the backdrop of an improved deal pipeline.”
Global IPOs remain resilient despite elevated uncertainty and market volatility
Global IPO volumes fell 14% in Q3 2024 with proceeds also falling by 35% YOY. In total, 310 IPOs raised US$24.9b in the third quarter of the year, outpacing IPO performance in the first two quarters of 2024.
Despite the complex economic and geopolitical landscape, listing activity in the Americas and EMEIA regions remained resilient in the first three quarters of 2024, with both showing double-digit growth by both deal number and proceeds compared to the same period last year. Asia-Pacific also saw a rebound in Q3, driven by increased activity in mainland China, Indonesia, Malaysia and South Korea.
Ongoing global interest in artificial intelligence (AI) continued to attract investor attention globally. Over the past two years, more than 60 AI companies have gone public annually, with about half turning a profit. Approximately 50 AI companies globally are currently in IPO registration, demonstrating sustained investor interest in AI-driven innovations.
For the remainder of 2024, the global IPO market is expected to be shaped by central bank policies, geopolitical developments and key election results. Lower interest rates and easing inflation may boost new listings, especially in sectors sensitive to borrowing costs. Strong performance in the US, Europe, and India should also drive global listing activity into 2025. Major IPOs, particularly those backed by private equity or from spin-offs, are also likely as companies seek more favorable market conditions.
Debbie O’Hanlon, EY UKI Private Leader, said, “Investors are preparing for increased volatility in the second half of 2024. With inflation and interest rates declining, new factors are becoming more important in shaping IPO decisions. In this uncertain climate, businesses seeking to take advantage of IPO opportunities will need to focus on strategic market timing and strong equity stories.”
