Brexit uncertainty drives big drop in London IPOs

The UK suffered a huge drop in the number of companies choosing to list on its stock exchange in 2019.

Just 36 companies listed on the London Stock Exchange (LSE.L) in 2019, according to official data from the company, a 60% slump compared to 2018.

The Financial Times said the total is also the lowest number of initial public offerings (IPOs) in London since the depths of the financial crisis in 2009.

The UK’s slowdown far outpaced the global average. Stock market listings declined by 19% globally last year, according to data from EY.

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UK listing activity was also down compared to wider Europe. The number of IPOs across Europe fell by 46% year-on-year, according to data from PwC.

Peter Whelan, UK IPO lead at PwC UK, said the slowdown was due to the ongoing trade war between the US and China, and uncertainty around Brexit.

“We are now seeing progress in both US-China trade relations and the UK election result, which has given a clear steer to the markets concerning Brexit,” Whelan said. “This provides a positive backdrop to the IPO markets as we go into 2020.”

Despite the slowdown, PwC said the London Stock Exchange remained the most active market in Europe. Many of the IPOs on the market have also been successes, Whelan said, “namely the IPOs of Network International, Watches of Switzerland and Trainline, which demonstrated significant investor demand with positive aftermarket performance.”

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