London's stock market may need some serious saving

Just take a look at the figures. There were only five new listings or Initial Public Offerings - in the first half of the year, raising £160m from investors. And, well, that is a miserable number.

- JAMES MOORE

According to data company Dealogic, it is the lowest in 30 years and a fall of 98 per cent when compared with the start of 2021 (when the UK was still suffering from the effects of the pandemic). It is even lower than the level recorded in the first part of 2009, when large parts of the City were still dealing with the aftereffects of the financial crisis.

Once a global giant - that would get interest from any international company looking to list - the London Stock Exchange is shrinking, and fast. Statista shows it hosted more than 2,400 companies at the beginning of 2015. Now, the number is less than 1,700 and that number is falling. It’s now big news today if a feisty young British growth company chooses to stay home rather than head off to Wall Street.

Predators from overseas - whether other companies or private equity - see London as the perfect place to go shopping for bargains. KKR, a US private equity firm, has just had a £4.7bn offer for Spectris, a UK-based maker of testing equipment, high-tech instruments and software, accepted. That offer is at a 98 per cent premium to where the company’s shares were trading before the takeover interest became known.

Private equity companies are all about maths. They have strict targets for the returns from their assets and will only act where they feel those can be met. That KKR thinks it can still hit them while paying a 98 per cent premium speaks volumes about the low valuation this company had prior to the former’s emergence as a suitor.