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Quarter of London-listed firms see ‘no advantage’ after float

London-listed firms
Image credit: Rolf E. Staerk / Shutterstock

Just under a quarter of London-listed firms said they have experienced no significant advantages from listing in the UK, according to a recent survey.

Research from the Quoted Companies Alliance (QCA), citing data from a YouGov survey of 101 small and mid-cap UK-listed firms, found that 23% saw no advantages stemming from their position as a floated company in London.

In the second half of the year, the surveyed companies said the difficulty of securing capital from public equity had increased, particularly in comparison to bank financing, which was named as the preferred method of raising capital from the firms.

The respondents represent approximately a 5% share of the total number of firms listed on the London Stock Exchange, which in 2023 stands at just over 1,900 companies.

The survey also found that 60% of firms described their experience as a publicly quoted company in 2023 as negative, 25% said neutral while just 15% said the experience has been positive.

However, more than a third (36%) of respondents noted that a London listing gave them access to greater capital.

London vs New York listings

The survey findings come after a slow year for London’s public markets, with IPO activity and trading volumes significantly lower than in 2022.

Some analysts have suggested that companies view New York as a better option for public listings, in part due to the larger pools of available capital and the promise of larger valuations.

Chris Mayo, a certified financial analyst at London Stock Exchange Group, however, argued in a LinkedIn post that the grass is not necessarily greener.

Mayo said that a quarter of US IPOs since 2018 are down by 90% and that average IPO performance between the UK and the US over that period is broadly similar.

“There is a bizarre amount of one-sided grass is greener-ishness with an ignorance of the actual data,” Mayo said.

“I frequently hear a lot of negative commentary about UK markets and there are indeed negative outcomes to point to. But is the US better? By some metrics yes but by others definitely no.”

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