IPO frenzy shows better times since Brexit vote

written by Bella Palmer

Rush in IPOs indicates better economic performance since brexit

There has been a rush in the number of companies listing on the stock exchange which is being seen as a positive signal. The number of listings is already 24 this year which was 26 for the entire 2016.

An Irish ban, AIB, is the largest IPO to come to the UK market this year. It is jointly listed in the UK and Ireland. It has £10.9bn valuation, but is not part of the FTSE 100 because many of the shares are listed on the Dublin Stock Exchange.

According one fund manager, this shows that investors are ready to move beyond the same listed companies. Oliver Browns, a fund manager, who invests exclusively in in UK IPOs expects at least a dozen more initial public offerings this year. Brown, who runs the £9.8m MFM UK Primary Opportunities fund, termed the rush to launch IPOs as significant because it indicates investors are “open to new ideas” rather than just going for the same predictable group of stocks.

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It is also an indication that the UK economy has been performing better than expected since the EU referendum vote, he said.

"Many companies put off their IPOs in the second half of last year due to the uncertainty about the outlook for the economy. The fact the IPOs have been happening this year shows that not much has actually changed as a result of the vote.

"The dust has largely settled, in as much as it is going to, for companies [worried about Brexit].

"Business conditions are broadly favourable and so for the remainder of the year we expect business conditions to be broadly favourable for the IPO market.”

The fund manager pointed out that property companies in particular, are coming to market.

Martin Turner, the long-time co-manager on the range of funds run by Gervais Williams at Miton, said it’s a “mystery” how this company came to the market at such a low valuation.

He added the current strength of the IPO market points to the fact smaller companies operate in niche areas of the economy that are largely unaffected by the wider economy.

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