Flotations raise a record £10bn on London market

The amount of money raised from flotations on the London Stock Exchange (LSE) smashed through £10bn in the first half of the year, a 64 per cent increase on the same period in 2005.

According to the LSE's latest figures, 194 companies raised a total of £10.4bn during the first six months of 2006, compared with just £6.4bn in the first half of last year. The biggest float of the half was the department store Debenhams, which raised £950m.

Of the near-200 initial public offerings over the period, more than a quarter were accounted for by foreign companies - from 15 different countries. The LSE pointed out that, in contrast, the New York Stock Exchange and Nasdaq had secured just 15 international floats between January and May.

Analysts believe foreign investors have been flocking to the London market to take advantage of its more relaxed regulation. Smaller companies in particular are said to have eschewed listing in New York to avoid higher costs and the more onerous regulatory burden of Sarbannes-Oxley.

Some within the City fear that a US takeover of the LSE could usher in tougher Sarbannes-Oxley rules and dampen the appetite of foreign companies to come to London.

Nasdaq, the American exchange that has already walked away from one move on the LSE, has since built a 25.1 per cent stake in the company and is widely expected to bid again.

Of more than 190 UK IPOs over the first half, 40 were on the main market, raising a total of £5.2bn, while the remaining 151 were on the Alternative Investment Market (AIM), raising £4.7bn between them.

The current rush of flotations is not expected to abate in the second half. On Monday, Standard Life successfully completed the market's largest float since Dimension Data's £6bn listing in 2000, raising £1.1bn to shore up its capital position and to fund future growth.

The oil giant Rosneft's float on the London and Moscow markets, planned for Friday, promises to be even bigger. The Russian group plans to float between 13 and 19 per cent of the business, which would raise up to $11.9bn (£6.3bn), and give the company a valuation of between $60bn and $90bn. The flotation has been mired in controversy, with several high-profile City personalities, including the likes of George Soros, claiming that the company has built itself up using assets stolen by the Kremlin.

The LSE said growth in overall trading volumes had been strong in June, with 7.3 million SETs trades carried out during the month - an increase of 77 per cent on June 2005.

Covered warrants and structured products also had a strong month in June, with some 7,714 trades - up almost 90 per cent on the same period last year. The total traded value of £80.5m is an increase of 299 per cent on the period last year.