As London stock market listings show signs of life, Reeves must add momentum | Nils Pratley

"After the drought, here comes the rain. Well, more of a light drizzle actually, but three flotations or float announcements in the space of a few days will be a relief for the parched London Stock Exchange. The biggest is Shawbrook, a bank focused on buy-to-let mortgages and lending to small businesses. It was taken off the market in 2017 by a pair of private equity firms, BC Partners and Pollen Street, and should now return by the end of the year"

"The timing is superficially odd because the talk is of higher taxes on banks in Rachel Reeves's budget next month, but makes sense in other ways. Bank valuations have soared in the past 18 months, helped by a benign climate for bad debts and a backdrop of (slowly) falling interest rates. From the point of view of private equity sellers wishing to cash in a few chips, wider price-to-book valuations count for more than a possible tweak to bank levies."

"It's good that it is happening, but let's not pretend that the wider weather has changed overnight. Much the same can be said of the Cheshire-headquartered Beauty Tech Group, a maker of LED face masks that debuted last week at 300m, and the Liverpool-based food business Princes, targeting a 1.5bn listing by the end of the month. In the old days there was a steady stream of such arrivals."

Shawbrook plans an IPO by year-end with an expected valuation near £2bn after private equity ownership since 2017. Bank valuations have risen over the past 18 months, supported by low bad debts and slowly falling interest rates. Private equity sellers prioritize higher price-to-book valuations over potential increases in bank levies. Talk of higher bank taxes in the upcoming budget creates timing ambiguity. Smaller London listings include Beauty Tech Group at £300m and Princes targeting £1.5bn. Few large companies with listing options choose London, as seen with Arm's Nasdaq listing. Visma, a €19bn Norwegian software company owned by Hg, reportedly prefers London for a planned IPO next year.

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