Joel Muckett 13 Dec 2017 08:38am

LSE back on top after proceeds rise 75%

The London Stock Exchange (LSE) is set to return as Europe’s most active market this year, with proceeds from initial public offerings (IPOs) being 75% higher than last year

According to new analysis from PwC, annual proceeds for the European IPO market in 2017 increased by 50% to more than €40bn (£35.3bn), while volumes increased by approximately 13%.

A third of proceeds raised from European IPOs were generated in London; driven by Special Purpose Acquisition Companies (SPACs) and Real Estate Investment Trusts (REITs), making up a quarter of UK IPO volumes and values.

PwC capital markets director Lucy Tarleton said the trend of investment company IPOs, such as SPACs and REITs, is expected to continue in 2018.

“The Pipeline for UK IPOs in the year ahead looks healthy, and includes a number of international companies, demonstrating London’s continued attractiveness for cross-border IPOs in Europe,” she said.

This year, 91 IPOs were raised in London, bringing in €11.7bn (£10.3bn) in value. Meanwhile, Europe’s second most active market – Borsa Italiana – raised £4.3bn (£3.8bn) from 23 floats.

The privatisation of Allied Irish Banks – listed in both the London and Irish Stock Exchanges – was the largest IPO of 2017, raising nearly €3bn (£2.65bn) in total.

Borsa Italiana hosted the second largest IPO of the year, topped by tyre manufacturer Pirelli who raised €2.3bn (£2bn).

Nine of the top 10 IPOs in European markets brought in over €1bn (£883,033) each, nearly twice as many as last year.

“As we head into 2018 there is strong momentum for European IPOs supported by low levels of volatility and market indices at record levels,” said PwC capital markets leader Mark Hughes.

“Continuing to deliver a smooth and orderly Brexit process will be critical to providing the market conditions for a healthy pipeline of European IPOs in 2018.”

News of the LSE’s success in the European IPO market comes at a crucial time for the exchange, as its chief executive Xavier Rolet stepped down last month following a request from the board.