London Stock Exchange enjoys best year for raising equity capital since 2007

by Jonathan Adams
London Stock Exchange

Despite the economic impact of the Covid-19 pandemic, 2021 will end as the London Stock Exchange’s best since 2007 for raising equity capital. 122 new companies have been listed on the exchange this year, raising a total of £16.8 billion from investors, boosting London’s reputation as one of the world’s most significant financial centres. The figure rises to £49.2 billion when rights issues of companies already listed on the LSE is taken into account.

That compares to £9.4 billion raised from 43 listings in 2020 – still a strong performance against the backdrop of the onset of the coronavirus pandemic that brought much of the world to its knees last year and still rumbles on, causing economic disruption. The London Stock Exchange was ranked third in the world, behind only the USA and China, for equity capital raised this year.

The biotech firm Oxford Nanopore and fintech international payments company Wise were among the biggest and most successful floats of the year. Deliveroo was another big one, though the delivery app’s share price performance has since disappointed. 39% of the LSE’s 2021 IPOs were for technology companies. London this year adjusted its rules to become more attractive to high growth technology companies on the recommendations of a major review.

The value of the equity capital raised by companies listed on the LSE puts European rivals in the shade. The London Stock Exchange Group, the public company that runs the exchange, noted that the exchange’s performance in capital raising means it has reinforced its position as

“by a significant margin the number one exchange in Europe, raising more equity capital than the Amsterdam and Paris exchanges combined.”

London Stock Market-listed companies have also finished the year on a high. By the close of trading yesterday, the first session since the Christmas break, the market finally regained the levels achieved before the pandemic-inspired sell-off in early 2020. A gain of 0.7% took the FTSE 100 to its best closing level since February 2020.

ftse 100 index

The benchmark index looks certain to close 2021 to a gain of almost 15% for the year, which would mark its most successful 12 months since 2009 and the post-financial crisis recovery. The mid-cap FTSE 250 index also rose by 1.1% yesterday as investors made up for the two additional holidays earlier in the week when other major stock markets had remained open and benefitted from improving investor sentiment. Having already enjoyed strong gains over the previous two days, European markets were quieter yesterday. Both the CAC in Paris and DAX in Frankfurt closed to minor losses.

On Wall Street the Nasdaq was flat, inching down 0.1% from the new record high, its 70th of the year, set the previous day. However, the Dow Jones gained 0.25% to take it within touching distance of its own new record high.

This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

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