Share flotations worth almost £5 billion were on a knife-edge in London trading as investors pushed share prices down at the opening for the fifth day running.
After an initial 40 points fall, the FTSE 100 was trading down 3.91 points at 6336.06 and has fallen almost 4 per cent in the past week. Oil prices also hit new four-year lows with Brent crude down another $1.12 to $89.09 a barrel at one point.
Tony Cross, market analyst at Trustnet Direct, said: “The market rally that has been going on in the face of adversity has now simply run out of steam as a series of geopolitical threats line up and we have the very real possibility of a third recession being seen in the eurozone.”
Housebuilder Miller Homes pulled its £450 million float 10 days ago citing market volatility. Today, shares in Pershing Square — a fund managed by activist investor Bill Ackmann which raised $2.7 billion (£1.7 billion) — fell 9 per cent on their debut in Amsterdam.
Advisers to Aldermore, the challenger bank which is hoping to be valued at £800 million when it prices its shares on Friday, expect it to push ahead.
This is despite reports that a roadshow to US investors at the end of last week had yet to pull in many orders for the shares. “There is no intention to change the price range ahead of Friday,” said an adviser to the float. Aldermore said 10 days ago that its shares would be priced between 217p and 265p.
Other major floats in the pipeline which have yet to be priced include Virgin Money valued at up to £2 billion, car auctioneer BCA Marketplace at up to £1.2 billion and luxury shoemaker Jimmy Choo worth up to £700 million.
Advisers to a number of the floats pointed out that Aldermore, Virgin Money and BCA had not indicated that they wanted to raise huge amounts of fresh capital.Reuse content