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Amsterdam IPO market gains as London holds breath for Brexit vote
[LONDON] A slowdown in company listings in London due to uncertainty around the upcoming Brexit referendum could be helping European rival Amsterdam's stock market, which has seen a rise in activity this year.
London - traditionally Europe's busiest stock exchange - has seen just over US$2 billion raised from listings so far this year, a fraction of the almost US$18 billion gathered over all of 2015, according to Thomson Reuters data.
Industry experts put much of the dip down to a reluctance to act ahead of the country's June 23 referendum on whether to stay in the European Union. A vote to quit the 28-nation bloc would have an uncertain outcome; it could prompt a swing in the value of sterling and affect Britain's economy. "The IPO (initial public offering) market ... is increasingly becoming more cautious as the Brexit vote gets closer," said Laurence Sacker, a corporate finance expert with accountants UHY Hacker Young.
The Dutch capital's stock market, though far smaller than London's, is well placed to benefit, say officials at the Euronext Amsterdam exchange. The city is a big continental financial hub, where more than 1 trillion euros of assets are managed by pension funds and other institutions, and has an attractive corporate tax system that helps some multinationals lower their rates, sometimes to below 10 per cent.
The number of listings that have either taken place in the city or are in the pipeline is at its highest level since 1999 for this point of the year.
The Amsterdam stock market - which raised US$7.6 billion from new listings last year - has already had three IPOs in 2016, with at least another five planned, putting it on track to beat the nine listings in both 2014 and 2015.
Joost Kromhout, head of listings at Euronext Amsterdam, said Britain's referendum had prompted some companies to chose the Netherlands to sell their shares.
"The referendum is playing a role now in the decisions about when companies go to the market," he said, adding that stability"gives investors the confidence needed to invest". "There is a nice list of companies in the market, or that have expressed their intention to float," he said. "The pipeline for this year is solid."
Those companies with plans to float in Amsterdam this year include Philips Lighting, Dutch insurer ASR and 3i Group's gym chain Basic-Fit.
Sif Group, which makes parts for offshore energy platforms, went public in Amsterdam last week, while agriculture company ForFarmers announced plans on Tuesday along with Basic-Fit.
An official at Basic Fit, which unveiled its offering on Tuesday, said that Brexit was one of the reasons that some companies were choosing to launch now to get their deals done by the time of the vote.