Funds raised by Initial Public Offerings in London
It’s always difficult to measure market confidence but the sharp increase in funds raised on the London Stock Exchange so far this year certainly points to rejuvenated investor appetite. Data from PWC’s quarterly report, IPO Watch Europe, show companies raised a total of €4.36bn (£3.6bn) in initial public offerings (IPOs) in the first half of 2013, compared with a miserly €950m (£790m) in the same period last year. With Royal Mail set to float in October and “a large pipeline of businesses sizing up the market”, according to PWC, the stage is set for a strong rest of the year – at least for the LSE.
See also - Royal Mail priced to go
Energy prices debate
Labour leader Ed Miliband compared energy companies to bankers when they cried foul of his energy price freeze proposal. But is the comparison fair? The chart shows that UK consumers have swallowed steep increases in gas and electricity prices while the largest energy supplier British Gas has seen generally rising profits. But the 4 per cent profit that British Gas takes on the average energy bill hardly puts it in fat cat territory and illustrates the many other costs that energy prices need to cover including wholesale energy, supply and environmental costs. Sadly a price freeze is no tonic for these.
Supermarket share
This latest data from Kantar Worldpanel shows how the budget and premium ends of the supermarket sector are booming. It was another all-time record for Aldi, while Waitrose and Lidl performed well too. Edward Garner, director at Kantar, says strong performances by retailers at both ends of the market pose a significant challenge for the big four supermarkets – Tesco, Sainsbury, Morrisons and Asda. The combined growth of Lidl, Aldi and Waitrose has taken three market share points out of the grocery market over the past three years and is forcing the big players to compete for an ever-smaller middle ground. In fact, Sainsbury’s was the only ‘big four’ grocer to increase its market share in the past year, with the others all losing ground.
See also - Profit plunge at Tesco
Mortgage approvals
Mortgage approvals continue to recover, as the latest monthly update from the Bank of England shows. In August approvals for house purchase were 31 per cent higher than in the same month last year, while remortgages were up 40 per cent. Only the 'other' category – which consists mainly of equity release products – continues to slide.
These growth rates sound dramatic, but it is worth noting that they only take the mortgage market back to 1997 levels. It is tempting but problematic to make comparisons with the 1994-95 housing market trough, because the Bank did not used to split out mortgage approvals by type. Total approvals are now running some way ahead their 1995 level, but many more of these are probably for remortgage or equity release. The home purchase market - which matters more to estate agents, for example - may well be weaker than it ever was in the mid 1990s.
