(Bloomberg) — Things are going from bad to worse for London’s IPO market, where less money has been raised this year than on some tiny frontier venues.
Most Read from Bloomberg
-
Cloud Computing Tax Threatens Chicago’s Silicon Valley Dream
-
San Francisco, Paris Named Best Cities for Urban Transportation
-
A Chicago Skyscraper Cements the Legacy of a Visionary Postmodern Architect
-
DC Business Leaders Welcome Return-to-Office Policy Under Trump
Fundraising from London initial public offerings has declined about 9% this year to $1 billion, pushing the UK four spots lower to 20th place in a ranking of global IPO venues, according to data compiled by Bloomberg through the end of November.
It’s been leapfrogged by upstarts including Oman, a market that’s 1% the size of the UK, as well as Malaysia and Luxembourg. That’s a big change from just a few years ago, when London would regularly feature among the top five venues globally.
The rankings show the depth of the challenges for the UK: The market has been undermined by low valuations, a risk-averse pool of local investors and growing competition from other financial centers. While the nation recently overhauled its listing rules, investors and executives say more needs to be done to reinvigorate the 300-year-old bourse.
Listen to the Bloomberg Daybreak Europe podcast on Apple , Spotify or anywhere you listen .
Roughly a dozen firms have listed in London this year, with the largest raising just above £150 million ($191 million). The city didn’t have any listings among the top 100 globally, with Greece, Sweden and South Africa all hosting bigger offerings this year. A number of billion-dollar share sales have also come to major Middle Eastern exchanges as more countries seek to have national champions list at home to deepen their domestic capital markets.
“Governments are doing everything they could to attract more companies to come, so the competition is now more intense,” said George Chan, EY’s Shanghai-based global IPO leader. “If we do not change this sort of landscape, it’s going to take a lot of time for the UK to be back on the top of the pyramid.”
Rising Stars
Much of the IPO activity this year has been in the Middle East and Asia, which together accounted for more than half of this year’s fundraising as well as five of the 10 biggest deals globally.
Late last month, Delivery Hero SE’s local unit Talabat Holding Plc completed a $2 billion Dubai IPO after boosting the size of the deal and pricing it at the top of a marketed range. It now ranks as the world’s biggest tech IPO this year. In October, hypermarket chain Lulu Retail Holdings Plc priced a $1.7 billion offering in Abu Dhabi and a unit of Oman’s state oil company raised $2 billion.
