Peel Hunt says UK IPO sentiment 'improving'

The broker added 18 clients to take its total to 150 by the year end, of which 43 are in the FTSE 350 with a total market capitalisation of £110 billion

Peel Hunt said it expects equity market conditions to remain muted but that sentiment towards potential UK initial public offers (IPOs) is improving.

Of late, trading volumes in the Square Mile remain "low" and capital markets transactions continue to be "subdued", expecting these trends "to continue until there are meaningful signs of recovery in the UK economy and fund outflows reverse".

In a separate release by the broker's research team, showing the number of firms listed in the Smallcap index dropped from 160 at the end of 2018 to 114 at the end of last year, excluding investment trusts, it was calculated that if the current trend continues the last firm will leave the index in 2028.

At present, a trading update for the year to 31 March showed revenues came to £85.5 million, up 4% from the year earlier, but with a loss "broadly in line" with predictions. 

Dealmaking was the main factor behind revenue rise, offsetting a drop in execution services in line with overall lower market volumes, and a small drop in research revenues.

Peel Hunt added 18 clients to take its total to 150 by the year end, of which 43 are in the FTSE 350 with a total market capitalisation of £110 billion.

Whilst IPO activity in the UK remains muted, there has been more activity in Europe and sentiment towards initial public offerings is improving in the UK, with investors increasingly willing to engage in relation to high quality firms, Peel Hunt said.

As reported last month, its RetailBook IPO platform recently raised funds to begin operating as a fully independent business, which is expected in the coming months.