IPOs outperform FTSE 100
1 April 2015
The 10 IPOs that have completed this year, generated an average return of 8.1%, according to Deloitte, the business advisory firm.
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.”
Note: 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.
IPO Barometer - Year to 31 March 2015
IPOs versus FTSE 100 - Over/(under) performance
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.
Notes to editors
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.
The information contained in this press release is correct at the time of going to press.
Member of Deloitte Touche Tohmatsu Limited.