Broker hails City's resilience despite wave of takeovers and defection
As anxiety over the health of the London stock market spreads through the Square Mile and Westminster, the investment bank said it has enjoyed 'a strong start' to its new financial year.
And it said revenues for the three months to the end of June were 'comfortably ahead' of the same period last year – sending its own shares up 5.4 per cent by late morning.
And it said revenues for the three months to the end of June were 'comfortably ahead' of the same period last year – sending its own shares up 5.4 per cent by late morning.
The upbeat tone is particularly notable because Peel Hunt has been vocal in raising concerns over an exodus of companies from the stock exchange.
In a report on Wednesday, it said the UK was on course for 'the biggest year of takeovers since 2021' after a flurry of merger and acquisition (M&A) activity in the first six months.
Many of the bids have come from private equity and the United States as bargain-hunting predators swoop on undervalued firms on the London Stock Exchange (LSE).
At the same time, London has been rocked by a wave of defections to other bourses with reports this week suggesting AstraZeneca – the UK's largest listed company with a value of £162billion – could move its listing to New York.
A lack of new listings through so-called initial public offerings (IPOs) means these companies are not being replaced – sparking fears of terminal decline.
But in an update at the company's annual general meeting yesterday, Peel Hunt bosses, led by chief executive Steven Fine, were on bullish form.
'We have had a strong start to our new financial year as market conditions have begun to improve,' they said in a statement.
'Whilst the macroeconomic background is hard to predict, investor confidence appears to be increasingly resilient.'
The firm highlighted 'higher revenue generation' across key arms of the business and – perhaps unsurprisingly given the wave of takeover activity – 'a significant contribution from M&A transactions' as it advised companies on deals.
It added: 'We continue to have a strong pipeline of M&A transactions, with a number of situations both announced and in process.'
However, bosses expressed fresh concern about the lack of new listings, a key revenue stream for investment banks such as Peel Hunt that earn fees working with firms to bring them onto the stock market.
'It remains to be seen whether a more general pick up in equity issuance and IPO activity will follow,' they said.
Set up in 1989, Peel Hunt listed on the LSE's Alternative Investment Market (AIM) in 2021. It now acts for 55 FTSE 350 companies, including 50 in the FTSE 250 and five in the FTSE 100.
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