IPO buffet: Western companies keep public offerings market buoyant

Recent market volatility is putting a damper on hopes that the market for new listings might be set to thaw, after the likes of O2, Aston Martin, Spotify and Dropbox all recently announced their intention to float in 2018.

The Brexit vote in 2016 paralysed London’s market for initial public offerings, with the capital tumbling down the international rankings for IPOs in that year, followed by a year of recovery in 2017.

Yet the heightened stockmarket volatility evident in February may has put all market participants on the alert.

Companies prefer to list when there is an "IPO window", in order to maximise how much money they can raise from going public. For that to happen, there needs to be stable regulation, rising markets and low volatility.

UK telephone company O2 announced on 24 February 24 it was plotting a £10bn stock market float, one of the largest in years.

The company was forced to postpone a previous attempt to list in 2016, after some of its rivals firms took the leap and fell, having failed to spark the interest of potential investors.

Iconic car manufacturer Aston Martin is another outfit that recently announced it was considering pursuing a public listing, although the group’s owners were reportedly still mulling whether to turn the ignition key.

Having reported pre-tax profits of £87m for 2017, on the back of record revenues of £876m, the carmaker had staged a stunning recovery from the £163m of red ink it incurred in 2016.

Bloomberg reported in January that Aston might fetch a valuation of as much as £5bn.

Andy Palmer, CEO said "The financial turnaround of Aston Martin is complete. In 2015 and 2016 it was about stabilisation; 2017/18/19 is about working to replace our core products and we are a year ahead of schedule; and 2020 onwards is about expanding the portfolio."

Meanwhile, on the other side of the Atlantic, Forbes reported that the number of US IPOs increased by half in 2017, to 160,, with the newly listed companies having raised a cumulative $35bn in fresh equity, nearly twice as much as in the year before.

Music streaming firm Spotify was another outfit eyeing a possible debut in the stockmarket, with expectations in the City that it would float in New York stocks at some point during the next two months, in one of the most highly-anticipated IPOs since Snap went public in 2017.

Dropbox was also expected to come to market soon, having already filed with the US Securities and Exchange Commission for permission to list on the Nasdaq stock exchange under the DBX symbol.

According to the Journal, the company was seeking to raise $500m via the offering, although that figure was preliminary and was expected to be updated in later filings.