Floats to cheer City amid retailer woes

Sir Richard Branson’s banking venture Virgin Money is expected this week to confirm plans for its float

As the City is braced for more bad news from the supermarkets this week, with a trading update from Sainsbury’s and the further fallout from Tesco’s £250m black hole, details of new floats will be the only ray of light.

Sir Richard Branson’s banking venture Virgin Money is expected this week to confirm plans for its float, following last week’s announcement that fellow challenger bank Aldermore will float in October.

Virgin Money’s listing could value it at £2bn. Earlier this month it announced that Glen Moreno, chairman of the Financial Times’ owner, Pearson, will join the bank as chairman in January.

Small lenders are seeking to compete with Britain’s biggest banks, and the stock market has benefited from a raft of fund raises, with TSB and OneSavings Bank listings in June, while Shawbrook Bank and Metro Bank are also said to be considering stock offerings.

The Business Secretary, Vince Cable, has spoken in support of the new challenger banks as a way to increase loans to small businesses to help boost the economy.

The IPO market is also likely to see Anglian Home Improvements float next year after reports at the weekend that it has hired Rothschild and Numis to advise.

The London listing market had a bumper week last week as the luxury footwear brand Jimmy Choo and housebuilder Miller Homes confirmed their plans to list this autumn.

News of the floats comes as investors are prepared for bad news from Sainsbury’s and Tesco this week. Analysts expect Sainsbury’s like-for-like sales for the second quarter to be the worst in many years as discount rivals Aldi and Lidl steal market share.

Meanwhile the investigation into the black hole in Tesco’s numbers rumbles on.