Tuesday, November 21st, 2017

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Excess Information Slowing British IPOs

IPOs in London have fallen substantially.The market for initial public offerings in the U.K. has been limited at best, but the reason could have as much to do with new reporting requirements as it does the economy, according to The Wall Street Journal.

Overall this year, the London Stock Exchange has seen 25 IPOs. By comparison, the U.S. market saw 42 just in the last quarter with another 140 in planning. Even London has seen substantially more activity in previous years, with 44 IPOs in 2010 and 86 five years before that, but a recent survey from Merrill Corp. suggests that deals could slow even further.

The volatility in the market has been a big cause of concern for many companies considering an IPO this year, but another key feature could be new laws governing information provided before an offering. Companies now must hand over hundreds of pages of data, but are extremely limited in their ability to make forward-looking assessments. This forces investors to put the pieces together themselves, with limited input from the people most familiar with that information.

Nonetheless, market fluctuations have played a role in scaring away some IPOs, as The Wall Street Journal reports Banco Santander is expected to delay until next year in hopes of a better market.

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