'Tough markets dissuade firms from floating'

The number of companies floating on the London Stock Exchange slumped in the last quarter as companies were put off by tough market conditions, a survey showed today.

PricewaterhouseCoopers’ survey of initial public offerings (IPOs) showed the number of new listings in London fell from 34 in the fourth quarter of 2001 to just 16 in the fourth quarter of last year.

The total offering value also dropped, from €627m to €323m.

The slowdown was seen across Europe, with the volume and value of IPOs on Europe’s principal exchanges during the quarter “considerably down” on the same period the pervious month, and flat when compared to the previous quarter of 2002.

The year as a whole also turned out to be one of the slowest for IPOs in recent memory, with the total number of European listings for 2002 down 45% on 2001, from 311 to 170.

In London, the number of listings fell 34% on the year to 91, although London’s total market share of IPOs on Europe’s principal exchanges increased from 44% to 54%.

US exchanges also suffered, with IPOs down 23% during the quarter to 27, against the same period last year.

Tom Troubridge, head of PricewaterhouseCoopers’ London Capital Markets Group, said:

“Ordinarily we would expect the final quarter to be an active period for flotations.

“However, as predicted at the end of the last quarter, this has not been the case.

“Although many companies are still making the preparations for a listing they are playing a waiting game until market confidence starts to return.

“We still do not expect the IPO market to pick-up much before the second quarter of this year at the earliest.”