Outlook gloomy as IPO market hits 10-year low

The new issues market in the UK is unlikely to see any signs of a recovery until the second half of 2003 at the earliest, after just one trading firm floated in the last quarter of the year.

The flotation of the Lloyds of London insurer Beazley Group last month brought the number of new issues for the year to 36, the lowest figure for more than a decade, according to a survey by KPMG Corporate Finance.

Neil Austin, head of new issues at KPMG Corporate Finance, said: "With confidence at an all time low and the inevitable lag as companies need time to complete their preparations as the market recovers, it is hard to see any significant turnaround before the second half of 2003 at the earliest." Total funds raised in 2002 through flotations were £4.8bn, a 51 per cent fall from the previous year's £9.9bn, and 21 of the IPOs were investment and venture capital trusts.

"There was some optimism in the IPO market place in the second quarter of the year, but this has proved to be a false dawn. Investors' appetite vanished in June and has not returned," Mr Austin said.

However, the KPMG survey found that the average funds raised in 2002, at £133m, was the second highest average figure since 1990, reinforcing the trend to larger IPOs.