By Daniel Hunter
The 10 initial product offerings (IPOs) completed so far this year have outperformed the FTSE 100 by 10%, according to Deloitte.
As of 31 March, these 10 IPOs outperformed the FTSE 100 by 10 percentage points over the quarter. This compares to an average return of 5.7% at 31 March 2014 on the six IPOs which completed in Q1 2014, outperforming the FTSE 100 by 7.3 percentage points over the quarter.
John Hammond, head of equity capital markets at Deloitte, said: “We are pleased to see that uncertainty over the upcoming general election, the Eurozone and the Middle East have not affected confidence in capital markets. This is demonstrated both by record highs in the FTSE 100 and the largest number of Q1 IPOs since 2007. However, we do expect capital markets to quieten down immediately before and after the election but once a new government is in place that activity will increase again in the second half.”
Chris Nicholls, head of IPO and equity advisory at Deloitte, said: “Even though the FTSE 100 climbed to an all-time high in March, IPOs which came to the market in the quarter have still, on average, significantly outperformed. An investment of £1,000 in each of the 10 IPOs would have been worth £10,809 at the quarter end, whereas a £1,000 investment in the FTSE 100 at each IPO date would have fallen to £9,814. IPOs remain an attractive route for investors to increase exposure to equities relatively fast and in significant size.”