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- LSE Group issues call to action to ensure sustainable, long-term future for London IPO market
- New research shows London remains a global capital market leader
- Key recommendations made for issuers, investors, advisers and Government
London Stock Exchange Group (LSEG) today announces the publication of, "Leadership in a changing global economy: The future of London's IPO market" a new thought leadership paper exploring the health of the London IPO market. Produced, in part, in response to the current debate surrounding the new issue market in London, the study explores the trends, opportunities and challenges for the world's most liquid international market.
The paper provides a straightforward and unbiased analysis of the realities of the London listing environment. In addition, it outlines a series of recommendations for ensuring the continuation of London as the pre-eminent home for UK and international IPOs.
The reports findings and recommendations come under five key areas:
- Pre-IPO engagement: Issuers should allow more opportunities for extended and widened engagement at pre-IPO stage including more independent pre-IPO research
- Pricing and valuation: Our analysis indicates that concerns that more IPOs in London are trading below their issue price compared to other financial centres, are unfounded
- Deal syndicates: When constructing its syndicate, a pre-IPO company should fulfil its needs with the smallest number of banks, adding more only when there is a specific practical reason to do so
- IPO fee transparency: Issuers should publish the band for banks' fees in the prospectus and disclose the criteria which determines how the fee is awarded
- Opportunities for policy makers: The UK government can help maintain the UK's status as a global financial centre by reinstating the need for regulators to consider the attractiveness of the UK's capital markets when regulating the financial services industry
Xavier Rolet, CEO of the London Stock Exchange Group said:
"A thriving IPO market is an essential component of a healthy economy. This study is a call to action for the City's IPO community. Together, we need to ensure that the London listing market continues to flourish. London remains the premier destination for ambitious companies from the UK and around the world seeking to raise capital. London offers access to an unparalleled pool of international capital, broad and deep advisory expertise, visibility alongside global peers and as a market, a track record of supporting businesses, small and large, that is unsurpassed.
"As well as making strong recommendations to issuers and the wider financial community, we are also calling on the Government to enable regulators to consider the UK's competitiveness in their regulatory framework. We are also reiterating our long-standing request for the abolition of stamp duty on shares."
The Mayor of London, Boris Johnson, said:
"London is rightly recognised as the most international financial centre in the world and the best place for leading companies to invest in and list their businesses. However, in times of global economic uncertainty and increasing competition from other markets, we have to shout louder than ever about what makes this city so unique. We should seize the opportunity to cement our reputation as the number one place to do business and I will do all I can to champion the cause."
The Lord Mayor of London, David Wootton said:
"London is the world's most international financial centre - a hub which brings investors together and directs funding to the many businesses around the UK and the world that are driving economic growth and creating much-needed jobs. In today's economic climate, London's ability to connect companies with investors becomes even more crucial. It is vital for us in the City to work together to deepen London's connections as the world's leading global financial centre - uniquely competitive, and uniquely equipped with the skills and expertise to meet the challenge from the established and emerging economies."
The full report is available for download: www.londonstockexchange.com/IPOreport2011
