A consistent flow of IPOs
International companies continue to look to London to tap into international investment in support of their future growth and during the first half of the year we’ve seen IPOs from across the globe.
We have welcomed issuers from the US, Canada, Israel, Russia, Australia and the EU. These have included Denmark’s first unicorn Trustpilot; Russia’s largest variety retailer Fix Price; Seattle-based video games publisher tinyBuild, which became the largest US company by market capitalisation to list on AIM and Canadian connectivity solutions provider Alphawave, the largest admission of a North American company in London Stock Exchange history. As it stands, more than one in three (38%) of issuers on London Stock Exchange are international.
Equally, though, London Stock Exchange continues to serve companies in its home market. After the IPO of Calnex in late 2020, there have been three further IPOs of Scottish companies in 2021 - AMTE Power, Parsley Box, and The Artisanal Spirits Company – and of two founder-led businesses from the North West – In The Style and musicMagpie.
AIM continued to be the world’s leading growth market and saw its highest level of daily trading in its 26-year history. In June, Victorian Plumbing became the largest-ever AIM IPO by market capitalisation (£850mn).
London’s tech momentum continues to build; there were 23 tech and consumer internet IPOs in the first half of 2021 with a combined market cap of £8bn+ and tech and consumer internet companies accounted for 50%+ of IPO capital raised.
One in four IPOs in the first half of 2021 were founder-led businesses IPOs’ and London’s founder-friendly approach will continue to evolve in light of the recommendations of the Hill review.
Capital raising in the fund sector has remained active with £1.2bn in IPO capital raised by five issuers, all within the alternative assets space including in digital infrastructure, energy infrastructure and shipping. Existing funds have returned to the market, raising over £3bn YTD, an increase of over 220% compared to the same period in 2020.
Continuing growth in sustainable finance
The need to decarbonise the global economy has never been more urgent, and corporates and nations alike are looking towards capital markets to help raise the funds required to make the transition to low-carbon. Similarly, investors are calling for transparency on climate-related risks and opportunities to aid investment decisions, highlighting the role of stock exchanges in facilitating decision-useful disclosures by issuers.
Our Sustainable Bond Market (SBM) has established itself as a destination for sustainable debt financing and earlier this year launched a world-first Transition Bond Segment as well as achieving a significant milestone when it reached 300 active bonds listed and $100bn of sustainable finance raised.
In equity issuance, five companies and funds – AMTE Power, Aquila Energy Efficiency Trust, Foresight Group, musicMagpie, and VH Global Sustainable Energy Opportunities - were given the Green Economy Mark at IPO in recognition of their contribution to the green economy. (The full new cohort of Green Economy Mark issuers will be announced later this month.)
Following 41 new ESG listings to date in 2021, there are 204 ESG ETFs listed on London Stock Exchange. ESG ETFs represent one of the fastest growing finance instruments on our markets.
In recognition of our innovations and commitment to green and sustainable finance, London Stock Exchange was delighted to be named ‘Stock Exchange of the Year’ at Environmental Finance’s Sustainable Investment Awards, beating off the competition for a second year running.
In the year of COP26, we are seeing stock exchanges play a core role in enabling the transition to a net-zero economy and London Stock Exchange continues to demonstrate leadership with its commitment to catalyse and finance market-wide decarbonisation. Working with the UN Sustainable Stock Exchanges Initiative, LSEG supported the launch of model climate disclosure reporting guidance aimed at making markets climate resilient.
Open to innovation
Whether by asset class or sector, geography or gender, the breadth of London’s markets and its openness to innovation and diversity has been demonstrated in the first half of 2021.
3 new sovereign issuers have been welcomed to the debt markets, where $262bn was raised through more than 400 bonds.
Investors have supported emerging sectors. For example, three IPOs in the year to date are in the new sector of cannabidiol products and treatments.
Female founders – such as Romi Savova of PensionBee and Poppy Gustaffson at Darktrace - have led successful IPOs. And they were not alone, with strong female representation on the boards of IPOs such as Wickes.
The UK has been a pioneer in sukuk financing – it was the first country outside the Islamic world to issue sovereign Sukuk in 2014 – and the UK government’s recent second £500m sukuk saw strong investor participation, with demand from a diverse group of high-quality institutional investors from the UK, as well as the major hubs for Islamic finance in the Middle East and Asia. Since the first listing on its markets in 2006, London Stock Exchange has become a leading Western hub for sukuk issuance. More than $10bn has been raised in sukuk financing in the first half of 2021.
The rise of working-from-home in response to COVID-19 has accelerated the desire to conduct deals digitally. London Stock Exchange has responded to this demand, supporting innovative and pioneering transactions from our issuers in the first half of 2021.
In an important milestone in capital markets automation and digitisation, London Stock Exchange's new digital platform, Flow, was used for the first time during the issuance of a $7bn syndicated multi-tranche bond in partnership with Barclays, HSBC, Linklaters and Freshfields. It demonstrates the potential of such platforms to improve current capital markets workflows.
SparkLive, London Stock Exchange's market-leading webcasting solution, was developed and launched in response to the growing demand by issuers to engage with the investor community via a digital platform. Since inception, it has broadcast over 100 events including 3i's Capital Markets Day, Synairgen's results, and Edison's 3-day Healthcare conference.
A growing demand for retail participation led to issuers such as Cellular Goods, Parsley Box, Pension Bee and Deliveroo using PrimaryBid’s innovative platform to enable retail investors, many of whom are also their customers, to access their IPOs on the same terms as institutional investors, supporting the UK’s public companies by providing additional capital and liquidity. These issuances have reinforced London Stock Exchange’s long-standing commitment to broadening retail investor access to public equity markets.
London. Always global
It has been a dynamic six months and this momentum is only the beginning. London is committed to bringing the world’s issuers and investors together – enabling growth, innovation and opportunity.
Head of London Stock Exchange Equity Primary Markets