An impressive year for IPOs despite turbulence in Q3
2 December 2015
The 28 Main Market IPOs that have completed so far this year generated an average return of 17.2% according to Deloitte, the business advisory firm. Year to date, these IPOs have outperformed the FTSE 100 by 21.2 percentage points. This is an improvement on the end of last year, when the 30 IPOs in 2014 produced an average return of 12.4%, which translated into an outperformance of 14.4 percentage points.
Chris Nicholls, head of IPO and Equity Advisory at Deloitte, said:
“This year has been somewhat of a rollercoaster. All-time highs for the FTSE in the first half gave way to elevated volatility brought about by investor concerns over slowing growth in China and a collapse in commodity prices. Despite this, we have seen nine IPOs since mid-October, and overall in 2015 IPOs have outperformed the market by some margin.”
An investment of £1,000 in each of the 28 IPOs is now worth £32,811, whereas a £1,000 investment in the FTSE 100 at each IPO date would have fallen slightly to £26,867.
John Hammond, head of Equity Capital Markets at Deloitte, adds:
“Going into the New Year, the IPO pipeline looks reasonably robust and the period of uncertainty has not discouraged companies from starting to plan for an IPO in 2016. In general, investors seem well accustomed to the prospect of a Fed rate rise later this month and there remains strong demand for high quality companies.
“In terms of sector, there is a bit of everything, with companies from the consumer and financial services sectors being particularly prevalent. What is particularly telling is the number of overseas companies in our pipeline, which demonstrates continued confidence in the strength of London equity markets.”
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.
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.