Admittedly, the performances of new UK flotations have been a bit of a mixed bag. Some companies, including pharmacy chain Supergroup and gold mine operator Barrick Gold, have floated pretty successfully, even managing to grow their market cap since flotation. On the other hand, there’s Ocado, which has seen its stock price plummet since it floated in July, while Betfair and fund manager Gartmore also haven’t had quite the reaction they were hoping for since their listings. E&Y reckons next year is going to be similarly tough: there’s a pipeline of companies who want to do an IPO, including the likes of New Look and Merlin Entertainment, who gave up on their plans to float back in February because the markets were too turbulent. But if investors still seem twitchy, they may keep putting off their plans.
Asia, on the other hand, has seen some pretty impressive activity. This year, companies in the region have raised $165bn (almost double the $98.2bn it made during its previous record year in 2006). Not surprising, considering Hong Kong and Shanghai saw the biggest float in history this year in the form of Agricultural Bank of China, which raised $22.1bn. Coming a close second was AIA (the Asian arm of US insurer AIG, which floated after UK insurer Prudential’s ambitious but ultimately ill-starred attempt to buy it), which raised over $20bn from its IPO.
David Wilkinson, E&Y’s UK IPO leader, says the difference ‘reflects the twin-track global economy, with Europe and the US trailing Asia’. Which is a theory that Jim Rogers seems to subscribe to: in an interview on the next stage of the European debt crisis, he told CNBC: ‘Greece is insolvent, Portugal has a liquidity problem, Spain has a liquidity problem, Belgium has been cooking the books for a long time, Italy has been cooking the books for a long time and the UK is totally insolvent,’ he said – the implication being that over the next few months, Ireland and Greece may not be the only ones to brandish their begging bowls at the EU.
Silvio Berlusconi and Belgian leader Yves Leterme might have something to say about that. But is he right about the UK? Well, it sounds like typically overblown Rogers rhetoric to us – and it’s certainly not an argument that the bond markets seem to agree with. But his central premise – that Britain’s debts are too high, and that now our North Sea oil has run dry, we have ‘nothing left to sell’ – is hardly ridiculous. UK investors can be forgiven for still being a little twitchy…