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Market marches to exceptional month: Highest number of new listings - Steady flow 'shows confidence'

MARCH 1994 saw the highest ever number of companies admitted to the London Stock Exchange's Official List in one month, record monthly proceeds raised through new issues other than privatisations, and a record monthly turnover in overseas equities, writes John Willcock.

The mergers and acquisitions market also achieved a long-awaited improvement in the first quarter of 1994, largely spurred by deregulation in the television broadcasting sector.

Stock Exchange newcomers raised a record pounds 3.4bn last month, more than half the pounds 5.9bn raised by new entrants during the whole of 1993.

There were also 46 new issues in March - the highest monthly inflow yet, beating the previous record of 42 set last November. The exchange said that the steady flow of new entrants showed that 'confidence in the market's capacity for capital-raising continues unabated'.

Amid the continuing debate over a new capital market for small companies to replace the Unlisted Securities Market, Glasgow has staked a claim to host one.

Significantly, the Stock Exchange said today that it 'remains committed to the interests of smaller companies, and is encouraged to see 24 joining the Official List with a market value of pounds 50m or less, including eight with a market capitalisation under pounds 20m'.

During the month there were 28 rights issues raising pounds 1.3bn. By far the largest was a call for pounds 670.3m from Allied-Lyons to fund its purchase of the drinks group Pedro Domecq.

March brought increasing volatility on the FT-SE 100 share index, caused largely by fears of rising long-term interest rates in the US and political worries in the UK. Turnover in UK and Irish equities for March was pounds 61.1bn, up 2.2 per cent on last month.

Turnover of overseas shares traded in London rose 2.1 per cent to pounds 71.3bn in the same period to register a record. There was a sixfold surge in trading in Mexican shares when the Mexican Stock Exchange was closed on 24 March in the wake of the assassination of a presidential candidate.

In the first quarter of 1994 there were 314 UK acquisitions worth a combined pounds 5.2bn, according to Acquisitions Monthly. During the same period last year there were 260 deals totalling pounds 3.5bn.

Granada's pounds 766m bid for LWT and MAI's pounds 283m offer for Anglia accounted for much of the total value of completed bids.

The largest non-TV bid by a UK company was Birkby's pounds 59m offer for In Shops.