The UK's main Initial Public Offering market has shown a strong upturn in activity in the first quarter.
So far this year seven trading companies joined the Official List to raise combined funds of £2,792 million.
This, says KPMG Corporate Finance, compares with just two trading company admissions over the same period last year. It is also the highest first quarter activity level since 2000.
The seven were: Lotte Shopping (£1,586 million); Comstar (£564 million); Trader Media East (£316 million); Qinetiq (£150 million); Rightmove (£77 million); Scott Wilson (£69 million) and Optos (£30 million). Additionally during the quarter, eight i nvestment trusts/VCTs arrived on the main market to raise a combined £183 million.
Neil Meredith, director at KPMG Corporate Finance in Birmingham, said: "This is great news for the market which has seen a dearth of large company IPOs over recent years. It demonstrates that appetite remains high for quality businesses with a sound track record."
He said the appetite for larger listings was set to continue.
Of the 16 trading companies who joined the main UK market in 2004 and 2005 to raise over £100 million each, 15 are recording gains. Admiral Group is the best perform-ing stock at 129 per cent above its issue price, followed by Eircom (+116 per cent) and Sutton Coldfield-based Dignity (+107 per cent).
Mr Meredith said: "This is good news for the new issues investor - £1,000 in each of these IPO fund-raisings over the last two years would now be worth an average of £1,500 compared to only £1,260 if invested in the market as a whole."
Meanwhile AIM remains active with an increase in foreign company IPOs.
This quarter 68 IPOs raised a total of £1,793 million, including 17 overseas entrants.
Mr Meredith said: "Foreign companies are attracted to London by the high quality, cost effective regulatory environment.
"The trend for overseas entrants is also driven by the lack of an equivalent junior market elsewhere. We are currently receiving an enquiry a day from the US. If you are looking to raise $20-$100 million, neither Nasdaq nor the New York Stock Exchange is the right place. It will be interesting to see if recent moves to open new junior markets in Germany, France and The Netherlands will bring competition into this equity space."
Looking ahead, the pipeline of new entrants remains positive, he added.
The biggest potential floats (by market capitalisation) this year include: Standard Life (£4-6 billion); Nottingham-based Experian (£4 billion); Debenhams (£3 billion); United Biscuits (£2 billion); Springer Science (£1.4 billion); CMC Group (£500 million-£1 billion); African Arabian (£550 million) and KazmunaiGas (£550 million).
AIM also has a healthy queue of candidates which include more on-line gaming companies such as Gameac-count and Jackpotjoy.com.
