(Bloomberg) -- Recent share offerings from London-listed companies have delivered returns for investors, a positive sign for the City as it strives to revive sentiment for new listings, according to broker Peel Hunt Ltd.
The UK has seen about a dozen block trades and capital increases this summer, including National Grid Plc’s mammoth £7 billion ($8.9 billion) rights issue in June and smaller transactions such as a £61 million sell-down out of greeting cards group Moonpig Group Plc last month.
Of those, nine have traded positively in the after market, with shares in National Grid and Moonpig gaining 40% and 17% respectively in the week following the deals.
“Beyond IPOs, broader UK ECM continues to work well with significant issuance volumes and strong aftermarket performance,” the Peel Hunt team led by Brian Hanratty wrote in the report Friday. This is providing “strong returns and helping with sentiment across the ECM product”.
London has trailed other European capitals in recovering from a lengthy drought in initial public offerings prompted by higher interest rates and geopolitical uncertainty. It has also been battling with defections from locally-listed companies to New York in search of deeper liquidity and heftier valuations.
Still, the UK has stayed ahead of its neighbors in terms of capital raised via other kinds of equity offerings like block trades and capital hikes.
Much of this has been driven by large deals out of blue-chip names, including multi-billion-dollar share placements by London Stock Exchange Group Plc and Haleon Plc shareholders. Issuance from small and mid-cap stocks is now on the rise, according to Peel Hunt.
While the market is still “selectively open” for IPO candidates, the report said the mood around UK stock listings has continued to improve following the successful debuts of Raspberry Pi Holdings Plc and AOTI Inc.
Still, expectations are focusing more on next year, according to the firm. “We continue to expect a broader UK IPO market re-opening in 2025, in line with many issuer conversations we are having at Peel Hunt.”
--With assistance from Joe Easton.
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