London will have a very strong year for stock market movements, analysts say, arguing that both Brexit and coronavirus offer companies unparalleled opportunity to expand.
Various big-name businesses that have seen growing online demand from home buyers during the Covid-19 lockout have unveiled attractive plans for initial public offering (IPOs) in recent weeks.
Clarity about Britain’s exit from the European Union on January 1 was a catalyst for many companies to raise money, according to experts, while the release of Covid-19 vaccines also raised investors’ concerns. about the deadly pandemic.
So far this year, renowned cobbler Dr. Martens, a food delivery service led by app Deliveroo and online greeting card vendor Moonpig have outlined plans.
“Looking to the year ahead, we can expect 2021 to be a very strong year for the UK IPO market,” said Scott McCubbin of EY, a London-based financial services giant.
“An increase in IPO activity may strengthen competition for investment, place more emphasis on early preparation for IPO and raise the profile of investors.
“Confidence continues to build with the Brexit deal now bringing clarity about the future relationship with Europe and the roll-out of Covid-19 vaccines.”
In addition to the mix, the online money transfer expert TransferWise has hired banks to coordinate a planned address.
British media reports that others could include insurer Canopius, an electric vehicle tax business owned by EDF Pod Point, and online fashion retailer True.
The IPO market has attracted interest in recent years as finances become more readily available, along with ultra-low interest rates.
“Over the last few years, we have also seen a strengthening in the funding available to UK and European companies in the early stages of their growth,” said Marcus Stuttard, head of key UK markets at London Stock Exchange.
“This means that there are more and more dynamic businesses at the level and size of development that are ideal for an IPO.
“These combined factors have contributed to the strong IPO pipeline we are seeing at the beginning of 2021,” he told AFP.
At the same time, investors have a lot of money, due to low loan costs and the value of several billion pounds of central bank incentive funds.
So London hopes to steal a march on competitive IPO destinations such as Frankfurt, Hong Kong and New York.
Britain ranked only behind China and the United States in terms of the total amount of money raised on the stock market last year, according to a recent EY study.
The British capital represented more than 40 per cent of the total IPO sums raised in Europe.
Brexit could deliver another impetus as the government wants to remove some stock exchange rules while trying to attract more big-name businesses.
The Brexit trade deal, which expired on 1 January, did not cover the financial sector – but Britain and the EU are aiming to seal a memorandum of understanding on financial services by March.
The City of London Corporation on Friday revealed in an audit that the British capital is still finding the United States and Hong Kong in attracting foreign company listings.
London now wants to compete more effectively against European competitors and EU officials are worried it could dump price levels.
Catherine McGuiness, chair of policy at the City of London Corporation, said: “The competitive strengths of London and the UK should mean we are well placed to seize opportunities as we embark on a new trade chapter outside the UK. European Union. “