London Stock Exchange Suffers IPO Flop

London contributed just 9% of all European IPOs this year.

According to data published by Bloomberg, initial public offerings (IPOs) in London raised 1.5 billion pounds ($1.8 billion) this year, accounting for 9% of the European total of $20.9 billion and marking the worst performance of the London Stock Exchange (LSE) since 2009.

In the post-Brexit European economy, London’s position as the unrivaled financial capital of the continent is threatened by ascendant stock markets in France and Germany.

For example, Euronext Paris dethroned the LSE as the European stock exchange with the largest market capitalization in November. And while the bourse was just able to pull back the top spot thanks to the pound rallying shortly after, the exchange’s days of enjoying a trillion-dollar lead over its continental peers are long gone.

While the U.K.’s economic woes are complex, recent interventions from the country’s economic guardians have rekindled old debates about the costs of Brexit.

Asked in parliament whether Brexit was contributing to the U.K.’s underperformance last month, the governor of the Bank of England, Andrew Bailey, summarized the effects of leaving the EU as “a long-run downshift in the level of productivity of a bit over 3%.”

What’s more, the EU has made no secret of its intention to disentangle its own market infrastructure from the LSE’s sprawling apparatus.

The combination of the U.K.’s shrinking economy and increasingly capable and well-liquidated EU exchanges means that London is no longer the default option for big-value IPOs.

The exchange didn’t claim a single unicorn IPO this year, a weak performance that has contributed to its overall lower market capitalization and helped Germany take the top spot for Europe’s listings proceeds thanks to the $9 billion flotation of the auto manufacturer Porsche that valued the company at 78 billion euros ($82 billion).

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