The Deloitte IPO Barometer

IPOs outperform FTSE 100

The 10 IPOs that have completed this year, generated an average return of 8.1%.

As at 31 March, these 10 IPOs outperformed the FTSE 100 by 10.0 percentage points over the quarter. This compares to an average return of 5.7% at 31 March 2014 on the six IPOs which completed in Q1 2014, outperforming the FTSE 100 by 7.3 percentage points over the quarter.

John Hammond, head of equity capital markets at Deloitte, said: “We are pleased to see that uncertainty over the upcoming general election, the Eurozone and the Middle East have not affected confidence in capital markets. This is demonstrated both by record highs in the FTSE 100 and the largest number of Q1 IPOs since 2007. However, we do expect capital markets to quieten down immediately before and after the election but once a new government is in place that activity will increase again in the second half.”

Chris Nicholls, head of IPO and equity advisory at Deloitte, adds: “Even though the FTSE 100 climbed to an all-time high in March, IPOs which came to the market in the quarter have still, on average, significantly outperformed. An investment of £1,000 in each of the 10 IPOs would have been worth £10,809 at the quarter end, whereas a £1,000 investment in the FTSE 100 at each IPO date would have fallen to £9,814. IPOs remain an attractive route for investors to increase exposure to equities relatively fast and in significant size.” 

Deloitte’s IPO Barometer measures the performance of shares in newly-listed IPOs against the performance of the FTSE100 at the time of launch.

The IPO Barometer

IPOs as referred to above are defined as London Main Market Listings of shares for trading companies (i.e. investment companies, venture capital trusts, transfers from other markets, cash shells etc. have been excluded).

The performance figures reflect share price movements only, take no account of dividends, and are not a measure of total shareholder return.  Issue price used in calculation is as at date of Admission and is based on performance relative to the FTSE 100 from date of admission to period end.

Past financial performance is not indicative of future performance, individuals must therefore seek appropriate advice before investing in IPOs.

Source: Company prospectuses, Company press releases and LSE information at 31 March 2014 and 31 March 2015. ppt refers to percentage point movement between the FTSE 100 and individual share performance.

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