EU referendum 'jitters' stifling interest in IPOs

There has been a "dramatic decline" in the number and value of firms listing on the UK stock market in the wake of the EU referendum.

Of the 41 companies that listed in January, only nine have successfully completed a stock market flotation as "pre-referendum jitters have persisted," according to research by Henderson Managed Investment Trusts.

The total value of initial public offerings (IPOs) has fallen by 40% in the past three months to £948m, down from £1.6bn this time last year.

"The chilling effect of the Brexit vote noticeably cooled companies' enthusiasm to list on the stock market, and we have yet to see IPO activity reheat despite market conditions settling," said Colin Hughes, a fund manager at Henderson Opportunities Trust.

"It's actually surprising activity was not even quieter ahead of the vote, and that perhaps reflects the unexpected Leave result in the referendum."

Earlier this month, Pure Gym Group , the country's biggest health and fitness chain, abandoned plans for its stock market debut due to market volatility.

The company had been seeking to raise £190m through an IPO to help fund ambitious expansion plans.

"Given the challenging IPO market conditions, the board has decided not to proceed with a listing despite the strong interest shown by potential investors," said Pure Gym CEO Humphrey Cobbold.

There is hope the IPO market could bounce back, according to a recent report by the accountancy firm Ernst and Young.

It estimates that higher valuations and lower volatility could spark a pick-up in IPO activity in the coming months and throughout 2017.