(Bloomberg) -- London initial public offerings have slumped to a 14-year low, far outpacing declines seen in New York and in Europe, as the UK capital struggles to attract new listings and its shares trade at a steep discount to international peers.

Just three tiny firms have listed in London this year, raising only about $14 million combined, the lowest since at least 2009, data compiled by Bloomberg show. In New York IPOs have fetched $3.5 billion, the lowest amount since 2016, while in Europe $2.15 billion has been raised, which is the least since 2020, the data show.

While listings globally have had a poor start to the year amid concerns that rate hikes are fueling an economic slowdown and trouble in the banking sector, London is in the midst of a particularly bad patch, worsened by elevated inflation and a lack of major investor appetite for the troubled economy.

“The UK equity market has typically been seen to lag in terms of valuations,” said Stephanie Niven, portfolio manager, global sustainable equities at Ninety One. “That’s driven a bit of negative sentiment around UK listings.”

Arm IPO

The City suffered a major blow this year when SoftBank Group Corp.-owned chip technology company Arm Ltd. confirmed it would pursue an IPO solely in New York for now, despite repeated entreaties from the UK government that the British firm list on the London Stock Exchange. 

SoftBank’s founder Masayoshi Son has pointed to the deeper investor base in the US and more attractive valuations, which have long been factors acting in New York’s favor.

Separately, building materials company CRH Plc said last month it planned to move its primary listing to New York from London, following firms like Abcam Plc and mining giant BHP Group in shifting primary listings away from the City. 

The UK’s vote to leave the European Union in 2016 sparked a tortuous process that fueled doubts about the viability of London as Europe’s leading financial center. Political and economic turmoil added to the country’s woes last year, with the resignation of two prime ministers, while a change of regulations for stock offerings to entice issuers isn’t paying off yet.

‘Historic Lows’

A trio of City of London firms, including Numis Corp., this week warned of weak investment banking revenues and capital markets activity at “historic lows”. A recent report by the City of London itself showed that rival financial centers like Frankfurt and Paris had boosted their attractiveness at a faster pace than London.

“The UK thus far hasn’t been very successful at carving out its tech industry,” Niven said. “I don’t think the UK particularly has a strong competitive positioning.”

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