After a weak race for dealmaking this year, two new investment trusts plan to hit the market in London
Here today was a much-needed boost for the city, with two companies announcing plans to float the stock market and confirm that the UK economy grew in July, allaying the worst fears about an impending recession.
The pound found some respite with improving mood, rising above the $1.17 mark, adding 4 cents to its valuation in a week.
This comes primarily after a bleak year in which the broader economy has slowed and bargains are drying up. But the double announcement of stock listings – from Independent Living, for £150 million, and Sustainable Farmland Trust, for £200 million – will ease concerns in the square mile about a recession.
Today’s macroeconomic data also looks less bleak. Official figures show the UK economy grew 0.2% in July.
It was lower than expected, but it allayed the worst fears about the severity of a potential recession this year.
Martin Beck, chief economic adviser at EY ITEM Club, said: “Last week’s announcement of energy price guarantees should greatly reduce the risk of the economy facing a deep recession, but the next year or so will still be very challenging.”
The new plans encourage the approach of city dealmaking. The drying pipeline of business — with fees from floats, takeovers and other market activities nearly halved this year — sparked talk of big-city job losses.
But the simultaneous arrival of announcements on two upcoming initial public offerings chimes with hope that the new government will chime in on its intention to ‘supercharge’ the financial services offered by Liz Truss during her successful campaign to become Conservative leader and prime minister. In which she called the city “the jewel in the crown of the UK economy”.
Richard Hunter, Head of Markets, Interactive Investor, said: “While these two new floats aren’t big deals in themselves, they indicate that there is, at last, some light at the end of the tunnel for London dealmaking after a bleak year. Is. “
Independent Living is a real estate investment trust that focuses on sheltered housing for the elderly. Its initial public offering hasn’t been priced yet, but it has said it is targeting a 5p per share dividend for its first two years as a public company. Atrato Partners is an investment advisor to Float, with RBC Capital Markets as the underwriter.
The Sustainable Farmland Trust invests in US agriculture, and is offering shares at 100p each, targeting a net initial yield of 4.5%. Its trans-Atlantic choice of city helps London’s reputation in attracting the international capital.
Credit: www.standard.co.uk /