London investment market is ‘tentatively’ improving, says Peel Hunt

Peel Hunt has pointed to an uptick in investment activity in the UK markets and that its revenues are ahead of where they were at the same time last year.

The London-based investment bank said it had seen “some improvement in the macroeconomic backdrop” in recent months.

That has helped lead to “tentative signs of a pick-up in equity capital markets (ECM) activity,” it said in a July 4 trading update.

It said that, as a result, its own investment banking revenues for the first quarter of the financial year are ahead of where they were at the same point in 2023.

Peel Hunt said it has advised clients on “a number of [capital markets] transactions” during the three months to June 30.

That has included acting as global co-ordinator on two initial public offerings carried out on the London Stock Exchange.

One of them was the bumper flotation of computing firm Raspberry Pi, which skyrocketed in value after it started trading last month and was seen as a welcome victory for the UK market.

Peel Hunt said it is also “encouraged by an increase in activity in both our execution services and institutional trading businesses”.

It said: “Consequently, revenues for Q1 FY25 (three months to June 30) are ahead of the equivalent prior year period and in line with market expectations.”

The statement chimes with what has been seen as a positive start to the year for London markets, with the FTSE 100 having gained as much as 9% since January, before falling back to about 6% up for the year as of July 4.

Meanwhile, the broader economy has shown signs of a comeback, with inflation falling back below the Bank of England’s 2% target and gross domestic product growing in the first quarter, ending a short recession at the end of 2023.

Peel Hunt’s trading update comes after a disappointing set of results last year in which it sank to its second consecutive pre-tax loss.

Last month, chief executive Steven Fine said: “We are seeing tentative signs that a recovery from the lows of the last two years is under way.”