If you follow the UK financial media, you might think the lights are about to go out at the London Stock Exchange (LSE). Initial Public Offerings have become rare, with attractive candidates like the British chip designer Arm preferring New York. Even companies like the building materials manufacturer CRH, which conducts much of its business in the United States, are drawn to Wall Street.

Startups often go public only when they have matured into stable businesses. However, this first impression can be misleading. „The London stock market is steadily gaining momentum after two years of paralyzing macroeconomic and geopolitical uncertainty“, says Scott McCubbin, UK IPO Leader at EY. He anticipates a resurgence in IPO activity in the second half of the year and into the next.

„In the first half of the year, 18 billion pounds in equity was raised in London“, states Tom Attenborough, Head of International Business Development, Primary Markets at the LSE. „This is roughly three times the amount raised at the next largest European exchange in Frankfurt.“

This makes London the fifth largest exchange globally, ranked between the two US and Indian exchanges. Two of the five largest stock offerings this year occurred in London, involving capital issuance by electricity network operator National Grid, and consumer healthcare group Haleon.

„This speaks to the depth of the market and its liquidity“, says Attenborough. „The highly successful IPO of Raspberry Pi was something of a watershed moment in terms of the perception of the vitality of the London markets.“ The single-board computer manufacturer comes from the IT ecosystem of the University of Cambridge, which also produced the chip designer Arm.

The pipeline is well-filled. French billionaire Vincent Bolloré plans to list the pay-TV provider Canal+ in London as part of Vivendi's breakup. The payment processor Ebury is also considering an IPO in the UK capital.

How does one market the trading venue as an attractive platform for IPO candidates? „We have a strong starting point in that London has always been an international market at its core“, says Attenborough. Just under two-fifths of the companies on the London market are international companies, with their business operations and headquarters outside the United Kingdom.

„Helping international companies gain access to a global investor base and tell their story on a global stage has always been a significant part of what London offers“, he adds.

London's markets open at eight in the morning when investors in Asia are still at work, and close two hours after the trading day begins in the US. „The rule of law, an internationally accepted language, the quality of the research ecosystem, and the advisor network: all these components make London the stock exchange of choice for companies from around the world“, states Attenborough.

This year, London has already seen five international IPOs: Kazakhstan's Air Astana, European Green Transition from Sweden, and three from the United States (AOTI, Helix Exploration, and Microsalt).

What brings US companies to London? „It always surprises people“, says Attenborough. „With our growth market AIM, we have a leading trading venue for small and mid-caps. For companies that feel ready to go public but are too small for the American market, this is really attractive.“ Across the Atlantic, the idea of an IPO for a company with a market capitalisation of 30 million dollars is „not as common“ as it is in the UK or Europe.

„The further east you go, the more likely you are to see the opposite“, says Attenborough. The local market may not have the capacity for a particular listing, so companies might consider a dual listing. „London could be this larger showcase for an international investor base“, says the LSE executive. „In countries like Kazakhstan and Uzbekistan, a lot of privatisations could be coming our way.“

Central & Eastern European countries like Romania and Slovenia are emerging markets with a number of exciting companies. „There are also some dynamic firms from the Asia-Pacific region that are not yet public and no longer see US markets as their primary destination,“ says Attenborough.

He doesn’t explicitly state it, but this likely includes companies from the People’s Republic of China that are no longer welcome on Wall Street. Among these is the Chinese fast fashion manufacturer Shein, which is considering London as an alternative.

How does one attract new companies? „There is no simple answer to how companies find us or how we find them,“ states Attenborough. „Some companies come directly to us and ask for help finding a broker or bank to advise them. Part of our job, especially for international companies, is to help them navigate the UK listings ecosystem.“

Sometimes, banks approach the exchange to inform them they have found a company they want to bring to market. „It could result from individual conversations or data we have pulled. For example, when we look at a particular industry, identify companies with the right profile, and talk to them about their long-term financing options“, explains Attenborough. „In recent months, engagement with private equity firms has also increased significantly.“

The LSE also holds events for companies and market participants. This year, there have already been forums on Europe and Central Asia, Israel, Nordic tech companies, healthcare, and UK scale-up companies. Events have also been held in countries such as Singapore, Poland, and Turkey.

However, the number of companies listed on the AIM growth segment is as low as it was in 2002. To attract more companies to the stock market, the British government has undertaken a comprehensive reform of the listing regime.

„The regulation of our capital markets has built up over more than 30 years“, notes Attenborough. „New rules were added, but not much was taken away.“ The fact that the Financial Conduct Authority conducted this „radical review“ of the listing regime and made changes is a very positive step. Regulatory changes such as the move toward dual-class share structures bring more flexibility to the listing regime.

Few German companies are found on the London market. Tui ended its dual listing and trades in Frankfurt. Phoenix Spree Deutschland and Sirius Real Estate have remained. The cleantech company Proton Motor Power Systems is also still listed there.