Flotations in 1993 set fresh record

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The Independent Online
THERE were 165 flotations on the London Stock Exchange in 1993, the highest since 1988, with a similar level expected in 1994, according to KPMG, the accountants. The year also saw the largest amount raised - at pounds 5.1bn - since KPMG's records began in 1984, writes John Willcock.

Neil Austin, head of new issues at KPMG corporate finance, said: 'All indications are for another excellent year for flotations, with the levels of interest at least matching 1993. There is a widely held view that we are entering a new era of lower inflation and interest rates.

'Coupled with the success of the Gatt negotiations, this may well mean that we can look forward to a less cyclical future. This should help City confidence and in turn encourage UK and foreign companies that the UK stock market is a good place to raise capital.'

Mr Austin said that, with the market stabilising and a slow recovery out of recession, many companies recognised 1993 as an excellent opportunity to come to the market.

'1994 will continue to be a good time to float and some household names, such as the House of Fraser and Beazer Homes, are already well advanced with their preparations.'

Mr Austin said that current indications were that the international scene would remain fairly steady. 'The most significant market, the US, seems stable although the Japanese market, which has been managed downwards, remains a bit of an unknown quantity,' he said.

'The outlook for 1994 is bullish with the assumption in the City that interest rates will not rise. The UK market is currently highly rated and even a drop of 10 per cent or so would not stop it being attractive to companies looking to float.'