A death of companies launching on the London stock market and US trade tariffs fuelling greater uncertainty among investors have created tougher market conditions, investment bank Peel Hunt has cautioned.
The company said there were historically low levels of equity capital markets activity in the UK over the past year.
This has seen a shortage in the number of companies launching their shares on the London Stock Exchange through an initial public offering (IPO).
Coupled with a flurry of listed firms leaving London for the US and other markets, it has resulted in “subdued” conditions in the UK, Peel Hunt said.
Peel Hunt reported a pre-tax loss of £3.5 million for the year to the end of March, slightly bigger than the £3.3 million loss reported the year before.
But revenues jumped by 6% year-on-year to £91.3 million.
It said it had been restructuring its team, resulting in a bigger cohort of more junior staff within its investment banking division, and taking action to reduce costs because of the pressure.
“Ongoing uncertainty continued to weigh on equity capital markets activity during the period, driven by geopolitical risks, elections, stagflation fears and US trade tariffs,” Peel Hunt’s chief executive Steven Fine said.
Mr Fine nonetheless said it advised on “the most successful European IPO of the year and on our largest M&A (mergers and acquisitions) transaction to date”.
French TV and film giant Canal+ held an IPO in London in December in the biggest new listing for the City in a number of years.
The decision for the Paris-based business to list in London was hailed by Chancellor Rachel Reeves as a “vote of confidence” in the UK’s stock market.
Peel Hunt also pointed to its strengthening M&A division amid a raft of takeovers and deals between firms over the year.
The investment bank said the new financial year had started more positively, with the US striking a number of key trade deals, including with the UK, which was helping to improve sentiment among investors.
Activity in the London stock market remains “subdued” but could strengthen if wider economic conditions continue to stabilise, according to the firm.
