The IPO market in London is in the doldrums, and it isn't hard to find a reason. The data on initial public offerings are stark. There have been 25 initial public offerings on the London Stock Exchange Main Market this year. That compares with 44 in 2010 and the 86 IPOs of 2005.
The U.S. IPO market rebounded in a big way in the second quarter, unlike London's IPO market which seems to have stalled. The boost in new U.S. listings has been underpinned by tech and new media, and Hong Kong has been the place to go for luxury goods, as evidenced by Prada's listing there this year. By contrast, London, where the broader market has benefited from the commodities boom, hasn't had a new niche sector arise.
Allan Taylor, a partner at global law firm White & Case LLP said, "It's just the reality of the situation is that they are not sure they are going to be able to get [IPOs] away because the markets are so incredibly choppy. The volatility is probably the biggest break on successful equity raises."
Few dispute London is a strong financial center. Still, fund managers say the market needs to investigate changes in the IPO process.