London Stock Exchange looks to Middle East as UK IPOs plummet

The London Stock Exchange (LSE) has turned to the Middle East for listings due to a lack of initial public offerings (IPOs) in the UK following last year’s EU Referendum.

The total raised on LSE’s equity markets dropped last year by almost 40% to £25.6bn, according to Reuters.

Funds raised through IPOs in 2017 so far have recovered slightly from 2016, but they are still reportedly much lower than in the two years previous.

Now, an executive at LSE has said the organisation is looking to Middle Eastern firms as it seeks to reassure investors, despite uncertainty about how Britain’s departure from the EU will impact London’s economy.

Speaking to Reuters, Ibukun Adebayo, the man in charge of emerging markets at LSE, commented: “Immediately, we see the bigger opportunity [for new listings] emanating from the Middle East, and then the longer term prospects are from the Indian subcontinent, and then Africa.”

LSE is reportedly promoting itself in the region through events, targeting regulators and large businesses with the help of indices provider FTSE’s Dubai office.

With there already being a number of London-based natural resources firms listed, LSE’s Ibukun Adebayo expects companies in this sector to be key for future IPOs.

LSE’s capital markets division, which covers IPOs, accounts for over 20% of the organisation’s turnover.

The head of IPO and listing services at professional services giant EY, Martin Steinbach, explained the importance of new listings to exchanges.

He said: “IPOs are a multiplier for derivatives, indices and clearing businesses: liquidity attracts liquidity.”

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