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London set to stay as global finance centre according to IPO market

London is set to retain its dominance as the world’s premier financial centre despite Brexit uncertainty, according to analysis of company flotations data by EY.

The Big Four consultancy’s quarterly “IPO Eye” survey of initial public offerings revealed what it described as a “slow but steady” start to the year.

In the first quarter there were 16 flotations in London – nine on the main market raising a total of £1.15bn and seven on the alternative investment market (Aim), amassing £149m.

While a 38pc drop in the number of IPOs in the same period a year ago, the total raised by the deals was up by 6pc.

EY said that the amount raised was held back by the fact only one of the flotations was private-equity backed.

However, digging down into the numbers, 11 of the deals were IPOs of financial services businesses, which accounted for 51pc of the total proceeds.

This, according to EY, “confirms that London continues to hold its position as a global financial centre despite political uncertainty”.

The IPO market has been volatile for some time with deals being pulled because of concerns about pricing and Brexit.

However, Scott McCubbin, EY’s IPO leader, said that worries are now likely to abate – at least for a while. Cross-border flotations – which made up 26pc of listings and 58pc of the funds raised last year – are likely to continue as businesses act in the period of expected calm ahead of Brexit.

“Although the market may remain low-key overall, the IPO pipeline is currently still looking strong for small main market listings and Aim listings,” Mr McCubbin said.

“We expect to see some of the delayed listings from this quarter to come on stream in the second quarter and activity to peak in the third quarter for this group of companies.

“There are some signs of more listings from larger companies anticipating more significant deal sizes, but this part of the market is very much waiting for a first-mover to lead the way.”

On a global basis, the number of flotations in the first quarter fell by 27pc on an annual basis to 287, while the total raised swung the other way, rising 28pc to $42.8bn.

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