The UK’s IPO market has been “selectively reopen” since June, analysts at leading investment bank Peel Hunt suggested, but investor confidence is on the rise.
The firm's most recent IPO speedometer, which gives the market a rating between 0-60mph, has ranked the market at 29mph, a moderate boost from its 27mph rating in June.
This follows the successful launch of three notable IPOs over the past two months, (Raspberry Pi, AOTI and Rosebank), all of which saw strong returns for investors. Rosebank performed extremely well, with a 228% rise by the end of July.
Analysts at the firm said: “As these UK deals have all traded up, it shows clearly that the IPO product is working for select UK issuers and has made investors money, boosting confidence.”
These developments have laid the groundwork for much larger launches in 2025, supported by positive changes domestically.
For example, analysts at Peel Hunt said that following the recent Bank of England rate cuts, and the relative political stability following the general election, investment in the UK had become far more attractive.
This rise in investor confidence has been supported by changes in the Financial Conduct Authority’s (FCA) listing rules, which will offer companies greater flexibility and should reduce the number of companies listing abroad due to differences in listing rules.
However, it has not all been smooth sailing for the IPO market. In the past two months, some notable IPOs have pulled out of the market, with the £500m Special Opportunities REIT cancelling its deal.
Additionally, other IPOs such as Air Astana have performed poorly, as many investors wish to avoid potential market volatility due to the European elections. As a result, the pipeline for further deals in the latter half of the year remains limited.
The firm concluded: “We are not yet in a market that is open for everyone but are making positive progress towards a broader re-opening.”