London sees fall in equity issues

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The London Stock Exchange reported a 55 per cent fall in equity capital raised in 11 months to end-February as a third-quarter share price rally and a pick-up in traded volumes failed to offset last year’s slowdown.

Total equity capital raised fell to £14.8bn for the period, down from £32.4bn a year earlier, the LSE said in a trading update yesterday. New listings were down to 107 from 144 last year.

The falls came despite a rise in activity since the third quarter; the London market for initial public offerings continues to recover with companies tapping into growing investor confidence and rising stock market valuations.

The LSE said there were 12 new issues in March in the UK and pointed to “an encouraging pipeline” for the new financial year starting in April.

Last year the eurozone debt crisis and jitters about the US economic recovery led many companies to put off plans to go public.

The FTSE 100 is up 12 per cent over the past year, and fears that a potential run on Cyprus’s banks might damage fragile investor confidence across the eurozone have not hit London shares hard over the past weeks.

The rise comes after a gloomy period last year when nervous investors shifted out of equities and into the perceived safety of bonds.

The LSE said the average trading volume was down over the 11 months compared with a year earlier.

The average daily UK equity value traded was 15 per cent lower, while at LSE’s Italian exchange, Borsa Italiana, volumes were 14 per cent down.