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No UK IPOs in first quarter; worst performance for 20 years

The health of the UK IPO market is the weakest for almost a generation, according to new figures from KPMG Corporate Finance.

There were no company listings on the main market in the first quarter and just two investment trusts floated with a combined value of £14.45m.

Neil Austin, head of new issues at KPMG Corporate Finance, compounded the dismal news with a warning that the outlook remained bleak. ‘The market has been dormant since the middle of last year and shows no immediate signs of reawakening. Amidst current economic jitters and war with Iraq, layer upon layer of uncertainty is leaving investors with a loss of appetite for new entrants,' he said.

Exit conditions for private equity-backed investments have been difficult since the public markets began their steep descent in spring 2000 and there is no sign of improvement. The combination of the complete absence of an IPO market and a scarcity of trade buyers has left secondary buy-outs as almost the only source of liquidity.

AIM, the London Stock Exchange's junior market for smaller businesses, managed only a slightly more encouraging first quarter performance. There were five listings with a combined value of £5.3m.

Financial anaemia was not limited to the UK. There were just five listings in the US worth more than $5m, with a combined value of $1.05bn. But even that figure overstates the appetite for new equity, with half the total accounted for by one IPO. There was only one listing in the whole of continental Europe.

Austin declined to offer a prediction about the timing of a recovery. ‘Few, if any, advisors can predict when the market will re-open but companies with realistic IPO ambitions should at least do their planning. When investor appetite returns it may do so quite quickly and the window could well be open for a limited period only,' he said.

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