Peel Hunt sees pick-up in investment activity in UK as group revenues rise

Peel Hunt has pointed to an uptick in investment activity in the UK markets and told investors its revenues are ahead of where they were at the same time last year.

The London-based investment bank said it had seen “some improvement in the macroeconomic backdrop” in recent months.

That has helped lead to “tentative signs of a pick-up in equity capital markets (ECM) activity,” it said in a trading update.

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It said that, as a result, its own investment banking revenues for the first quarter of the financial year are ahead of where they were at the same point in 2023.

Peel Hunt has pointed to an uptick in investment activity in the UK markets and that its revenues are ahead of where they were at the same time last year. (Photo by Nicholas .T. Ansell/PA Wire)Peel Hunt has pointed to an uptick in investment activity in the UK markets and that its revenues are ahead of where they were at the same time last year. (Photo by Nicholas .T. Ansell/PA Wire)
Peel Hunt has pointed to an uptick in investment activity in the UK markets and that its revenues are ahead of where they were at the same time last year. (Photo by Nicholas .T. Ansell/PA Wire)

Peel Hunt said it has advised clients on “a number of [capital markets] transactions” during the three months to June 30.

That has included acting as global co-ordinator on two initial public offerings carried out on the London Stock Exchange.

One of them was the bumper flotation of computing firm Raspberry Pi, which skyrocketed in value after it started trading last month and was seen as a welcome victory for the UK market.

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Peel Hunt said it is also “encouraged by an increase in activity in both our execution services and institutional trading businesses”.

It said: “Consequently, revenues for Q1 FY25 (three months to June 30) are ahead of the equivalent prior year period and in line with market expectations.”

The statement chimes with what has been seen as a positive start to the year for London markets, with the FTSE 100 having gained as much as 9 per cent since January, before falling back to about 6 per cent up for the year as of July 4.

Meanwhile, the broader economy has shown signs of a comeback, with inflation falling back below the Bank of England’s 2 per cent target and gross domestic product growing in the first quarter, ending a short recession at the end of 2023.

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In April, Peel Hunt said sentiment towards company listings had started to improve in the UK after a quiet year.

At the time, the company reported a “resilient” financial performance in challenging market conditions.

In April, it said revenues for the year to the end of March are expected to hit about £85.5 million, 4 per cent higher than the previous year.

The increase in sales was driven largely by its investment banking division, particularly from mergers and acquisitions.

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Peel Hunt said this will have been achieved despite equity capital markets remaining challenging.

But the rise in sales was “not quite sufficient to offset cost pressures”.

There has been a broader slowdown in activity among investors in recent years, reflecting market volatility, economic uncertainties and political tensions.

London has struggled to attract new companies, and several businesses that are listed in the capital have abandoned or downgraded their listing.

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Earlier this year, Peel Hunt said market trading volumes remained low and it expected that to continue until there are meaningful signs of recovery in the UK economy, and investors stop taking money out of funds. But it offered some green shoots in terms of appetite for company listings.

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