2014 could set record for value of IPOs on London stock exchange main market

London Canary Wharf

This year could see a record amount of cash raised by companies joining the London stock exchange's main market.

By the end of August, about £7.4bn had been raised, according to Capita Asset Services, and on current trends this could reach £11.7bn by the end of the year, well above the record £8.7bn set in 2011.

On AIM, the junior market, only 55 initial public offerings (IPOs) have been staged this year, well down on the 325 seen in 2005. But the 55 raised an average of £32m each, which is the highest figure since records began.

One in three of the companies floated on the London market has been a consumer goods or consumer services group, with the sector accounting for a total of £6.6bn so far this year. The flotation of AA for £1.35bn was the largest, followed by B&M European Value Retail, Saga and Pets at Home.

Justin Cooper, the chief executive of Capita-owned Shareholder Solutions, said: "The IPO goldrush in the first half of 2014 came hot on the heels of a sharp upturn in share prices, as the stock market soared at the end of 2013.

"However, despite a strong start, and a surprising summer flurry of flotations, those hoping to come to market in the latter half of 2014 are having to contend with a cocktail of flat markets, weak earnings and poor dividends. With a number of IPOs failing to meet expectations, enthusiasm amongst fund managers is lower than at the start of the year, and has allowed them to be more discerning as they approach the offers on the table. This fear of market saturation recently led to several companies, including Hungarian budget airline Wizz Air, to withdraw from the field."

Among the companies said to be preparing to float are the banking group Aldermore and the telecoms group EE, said Cooper.

Powered by Guardian.co.ukThis article was written by Nick Fletcher, for The Guardian on Monday 15th September 2014 00.03 Europe/London

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