Investors expect a buoyant UK IPO market in the next 12 months despite the uncertainty caused by the approaching election, last year’s IPO woes and a fall in oil prices, according to the first Investor Sentiment Index from BDO’s Capital Markets team.
The global research, which questioned institutional investors investing in UK equities with a combined $10 trillion (€880 billion) under management, found that 76% of respondents expected the numbers of IPOs on the Alternative Investment Market (AIM) to increase or at least remain unchanged. At the same time, 77% expected the same for the number of IPOs on the Main List.
Chris Searle, Capital Markets Partner, said: “Despite all the uncertainty, global investors continue to rank the UK as a key place to do business. This positive sentiment is particularly welcome given the number of floats that failed to make it to the market last year.”
A lack of UK bank funding was identified by 71% as the overwhelming reason why companies had to seek a listing in order to raise new funds, with technology companies singled out by 51% as particularly attractive for investors over the next 12 months. This was by far the most cited sector, followed by Consumer Goods (36%), Financials (33%) and Healthcare (30%).
In terms of company size, some 67% selected large companies of over £300 million (€400 million) market cap as the more attractive to investors in 2015.