The concerns over a slowing global economic environment hit by US-China trade tensions, weak eurozone growth and prolonged Brexit uncertainty knocked flotations and equity raising on the London Stock Exchange last year.
The entire market value of all firms trading on the London Stock Exchange totalled more than 3.9 trillion pounds (US$5.07 trillion) at the end of 2019, making it the slowest year for fundraising activity for more than a decade, according to data gathered by LearnBonds.com.
Public markets are usually considered a route to broader investments from pension funds, international investors and individual savers. However, in recent years large firms have left stock markets or remained in private hands, attracted by large pools of cash for investment held by private equity firms.
The total value of all companies trading on the London Stock Exchange hit an all-time high of 4.5 trillion pounds in January 2017. The beginning of the third quarter of 2017 brought a significant drop to 3.9 trillion pounds as global trade fluctuated, by the end of the year the market value of listed companies on the London bourse had risen to 4.2 trillion pounds.
Market fluctuations
The value of listed UK stocks remained above 4.2 trillion pounds in July 2018, although it had slipped earlier in the year. However, the last quarter of 2018 saw a continuous fall, resulting in a value of 3.7 trillion pounds for the listed companies at the end of the year, the lowest figure in four years.
In July 2019, the market value of all companies trading on the London Stock Exchange jumped to more than four trillion pounds, but just three months later it dropped again to 3.8 trillion pounds.
The number of companies listed in London, Europe’s largest stock market by far, has fallen dramatically over a similar period. In January 2015, it hit an all-time high with 2,429 listed companies. Since then, the number of firms on the bourse has fallen steadily, particularly between January 2017 and January 2018.
During this period, the number of publicly listed companies opting to leave the stock exchange and become private firms soared 40 percent, compared to the year before, according to public data analyzed by the law firm Pinsent Masons.
Public to private deals
A total of 28 businesses listed in London were snapped up by private equity firms in “public to private deals” in 2018. The value of deals more than doubled last year to 21.1 billion pounds in 2019, up 113 per cent from 9.9 billion pounds in 2018.
The four-billion-pound buyout of defence group Cobham by US private equity group Advent International was the most high-profile deal that year.
The number of companies trading on the London Stock Exchange stood at 2,055 by December 2019, the lowest point in a 12-month period where firms left the market.
Over two thousand companies, with a capitalization of over 3.9 trillion pounds, made up to 818,000 daily trades in December 2019, according to the London Stock Exchange Monthly Market Report. Although this amount is a slight increase compared to the previous month, it is still below 2018 figures, where the average number of daily trades peaked during February of that year and rose to 1.2 million trades.
