After a sluggish first half of the year, the market for new London listings is beginning to stir.
Peel Hunt Ltd's (AIM:PEEL) latest IPO Speedometer, a measure of the health of the market, has ticked up to 28 miles per hour in September, from 27mph in July.
That still counts as “second gear”, or selectively open, but suggests that the worst of the stall is behind us.
The broker points out that volatility has calmed, with the VIX and its European equivalent both below 20, while stock markets are near record highs.
In the UK, the pickings have been slim, but the signs are encouraging. The Beauty Tech Group is preparing to float, joining this year’s handful of names such as MHA, Achilles Investment Fund and Applied Nutrition.
Summer lull
Peel Hunt also stresses that equity capital markets, the catch-all for share sales outside of IPOs, have been busy even through the summer holiday lull.
Since July, there have been 11 UK deals raising more than £20 million, with Peel Hunt involved in seven of them.
The next hurdle is conversion. Pipelines only matter when companies press the button.
Peel Hunt says it is “seeing some IPOs come to market and trade successfully will be important to give confidence to the broader pipeline”. That pipeline has been growing.
Pipeline growing
Press reports have linked a wide variety of companies with possible floats, from fintech names such as Starling Bank, OakNorth and Zopa, to retailers like Waterstones and Loveholidays, and even a spin-off of De Beers from Anglo American.
Corporate private equity exits are expected to add to the mix.
Investors remain choosy. Peel Hunt characterises the market as open only to best-in-class issuers or niche themes that resonate. In practice, that means mid-cap companies with clear growth stories, although larger names are circling for 2026.
Founders have led much of the activity in the past 12 months, but private equity and corporate-backed deals are likely to take up more space in the coming year.
Fund flows still reflect caution. Domestic UK equity funds have seen outflows in 50 of the past 51 months, with another £657 million leaving in August.
Reboot and rebuild
Yet Peel Hunt notes that global funds shed even more last month, which it sees as a sign that international investors may be warming to the UK. Relative performance helps.
The FTSE 100 is up 13% this year, ahead of the S&P 500 once currency moves are factored in.
Peel Hunt’s Speedometer may only be nudging up by a mile an hour, but the road ahead looks clearer.
If autumn’s flotations can make it off the grid and trade well, confidence in the market will start to rebuild.