AUS
NZ
UK
CA
USA
IND
Highlights:
- US stock listings have nearly halved since 1996, and IPO performance has been underwhelming, with investors seeing average losses of 7.1%.
- London’s listings have dropped 19% in the same period, with only 26 new listings in 2024, indicating a weak year for the market.
- Analysts point to low interest rates and the rise of private equity as key drivers behind the decline in public listings across the US and UK.
The global stock market is grappling with a significant decline in company listings, with the United States facing a particularly sharp drop, despite its reputation as the world’s most dynamic market. A report by AJ Bell highlights that the number of US stock listings has nearly halved since 1996, and initial public offerings (IPOs) have dropped drastically, leaving investors with negative returns. The UK, while also experiencing a downturn, shows a less severe decline in comparison.
Shared Declines in US and UK Listings
According to data from the World Bank, the number of stocks listed on US exchanges has fallen from a high of 8,090 in 1996 to just 4,315 in 2023— a 47% decrease. By contrast, London’s listings have dropped 19% over the same period, from 2,041 to 1,718, according to AJ Bell. The decline is not just limited to the number of listings but also in the volume of new entrants to the stock markets. London has seen only 26 new listings in 2024, with just nine being IPOs, putting it on track for its weakest year since 2009.
US IPOs Struggle Amid Market Volatility
The US IPO market has also seen significant decline, with only 152 IPOs in 2024, compared to an average of 253 since 2000. Furthermore, the performance of these IPOs has been lackluster, with 67 of the new listings trading below their offering price, leaving investors with an average loss of 7.1%. AJ Bell’s analysis suggests that despite hopes of a market resurgence, the US stock market remains challenging, both in terms of new listings and investor returns.
The Debate Over Regulation and De-Equitisation
There is ongoing debate over whether looser regulatory requirements could attract more companies to go public. However, Russ Mould, AJ Bell’s investment director, warns that easing regulations could create more problems in the long run, leading to potential scandals and a loss of investor confidence. He also points out that deeper factors, such as historically low interest rates and the rise of private equity, are contributing to the decline in public listings. With private equity offering companies the ability to raise capital away from the public glare, the need to list on public markets has diminished.
