By David Walker The UK lags far behind other developed countries both on the Continent and across...
By David Walker
The UK lags far behind other developed countries both on the Continent and across the Atlantic in providing access to market flotations to private investors, according to Mark Stacpoole from EO.net.
Stacpoole said private investors were more likely to support a company whose shares they bought at flotation purchasing, on average, three more of the company's shares after the flotation for every one they bought in the IPO. But 75% of flotations remained solely an institutional-investor affair.
He said the government had realised the important of offering flotations to the retail investment market when they privatised swathes of publicly owned corporations in the 1980s.
"But in other markets, such as Italy and France, it is mandatory to offer IPOs to retail investors, and in the US it is very much a retail supported market. But it is clear in the UK that this needs to change. We want to avoid the situation where the private investor starts love-30 down down when playing the institutional investors," Stacpoole said.
He added that the information retail investors could access about companies whose shares they held "certainly lags far behind what the institutional investors can access" in events such as meetings with company management, conference calls and analyst briefings. The European model will come to us and open things up to develop a more open playing field."