London IPO pipeline "building up" on anticipated rule change

Following Britain's departure from the EU, the UK government has rolled out a series of financial reforms to boost London's global attraction as a financial centre

London's IPO pipeline is "building up" in anticipation of the biggest shake-up in UK listings rules in 40 years, London Stock Exchange Plc CEO Julia Hoggett said on Wednesday, as Britain lags Europe and the US so far this year.

Following Britain's departure from the EU, the UK government has rolled out a series of financial reforms to boost London's global attraction as a financial centre.

London, nevertheless, has faced firms like UK chip designer Arm choosing to list in New York instead of London to chase deeper pools of liquidity.

So far this year, there have been four UK IPOs, raising $371 million, per Dealogic. There have been 35 IPOs in Europe overall, raising $12.22 billion, and 66 US-listed IPOs raising $14.72 billion, Dealogic said.

We are going through the biggest rewrites of our primary market rules in 40 years and some of the reason why we have seen firms defer is that they are waiting for that rule change in order to take advantage of the ruleset, Hoggett said.

The FCA in coming weeks is due to issue final rules that combine the premium and standard listing segments on the London Stock Exchange to ease red tape and speed up listings.

Broker Peel Hunt said there has been minimal IPO activity in London for the last two years. We believe this needs to be actively addressed as the FTSE Smallcap will cease to exist by 2028 at the current run-rate, it added.

Hoggett said the IPO pipeline is building with firms from Britain, Asia, the Middle East and Europe.

Once we start seeing the rule change come through, then there is cause for optimism. There is more in the pipeline than there has been for some time, she added.

There is an awful lot of debunking that we have to do, Hoggett said, referring to the notion that London is no longer an attractive place to list.