Although the UK stock market's performance this year has been modest – up some nine per cent – it hasn't stopped retail investors pouring money into equities and investment funds.
Derisory savings rates and rising inflation have persuaded many investors that they are much better off holding assets that have a chance of generating returns in excess of inflation – even if those returns are not guaranteed.
The somewhat subdued stock market has also not stood in the way of companies deciding that it is the right time to take their businesses public and list them on the London Stock Exchange, often crystallising fortunes for founders and executives.
So far this year, nearly 100 businesses – from delivery company Deliveroo through to DNA sequencing company Oxford Nanopore – have gone public, issuing shares via an initial public offering (IPO) that can then be traded in London.
So far this year, nearly 100 businesses have gone public, issuing shares via an initial public offering
It's the biggest number of floats since 2014.
Good news? Yes, but there are concerns that some (not all) companies are coming to the market at inflated prices, leaving early investors disappointed as the shares subsequently fall in price.
Dan Lane, senior analyst at share dealing company Freetrade, says the IPO market has become 'Jekyll and Hyde' in nature – 'with lower quality IPOs such as Deliveroo endangering the overall quality of the stock market'.
'There is a danger that firms are rushing to capitalise on a flood of lockdown money,' he warns.
Mike Coombes works for PrimaryBid which helps companies make their IPOs as private investor friendly as possible.
PrimaryBid believes private investors should be able to buy shares in all IPOs at the listing price – and not have to wait until dealings in the shares commence before buying.
It's a view The Mail on Sunday supports through our Fair Play For Small Investors campaign.
While acknowledging that some IPOs this year have proved disappointing in terms of shareholder returns, he argues that a robust new share issue market should be welcomed.
'More companies coming to our public market is great news for investors,' he says. 'Equities are liquid, transparent and well-regulated. Private investors can trade with ease, either buying shares in companies – old and new – and investment trusts.'
Although he accepts that IPOs carry a high risk-reward ratio because investors are stepping into the dark, the performance numbers are encouraging overall.
PrimaryBid has examined the share price returns of 72 IPOs that have been made via the London Stock Exchange this year – main market or the Alternative Investment Market (AIM).
All were at least £10million in size – smaller ones have been ignored as have secondary listings (where a company already has a stock market listing elsewhere in the world).
The returns are based on the difference between the listing price and the closing share price last Thursday.
The biggest 'winners' and 'losers' are shown in the table below – with a number of familiar names among them.
Winners include FTSE100 cyber security company Darktrace (share price up 74 per cent) and FTSE250 listed Auction Technology, an online auctioneer (up 150 per cent).
Losers include furniture maker Made.com (down 31 per cent) and food delivery company Deliveroo (down 33 per cent).
Across the 72 listings, PrimaryBid says the average return is 8.2 per cent, slightly worse than the return from the FTSE All Share (9.1 per cent) this year.
'Yes, given the range in performance, the figures show the high risk-reward nature of IPOs,' adds Coombes. 'But I would argue that they are less risky than popular assets such as cryptocurrencies which are able to advertise their wares with almost complete impunity.'
Russ Mould is investment director at wealth manager AJ Bell. He says it is good that more firms are looking to access capital on the London Stock Exchange.
But, like Freetrade's Lane, he says investors must not get caught up in the hype that often surrounds new share listings and end up overpaying for their shares.
He says: 'A new share issue should be analysed and researched in exactly the same way as a company whose shares already trade on the market.
'First, an investor must ensure a new share passes four hurdles: it fits their overall investment strategy and time horizon while meeting their target investment returns and appetite for risk.'
If a share doesn't clear all four hurdles, Mould says an investor should 'move on and fight any fear of missing out'.
If it does clear them, an investor must then do some homework on the company looking at its business model and potential to grow.
Adds Mould: 'If they like what they see, and feel the stock is sensibly priced, then the new shares may be worth buying.'
WHY SMALL INVESTORS DESERVE A SLICE TOO
What experts unanimously agree on with regard to new share issues is that private investors should be allowed to buy shares on the same terms as big City institutions.
This does not happen at the moment and it's why The Mail on Sunday is campaigning for 'Fair Play For Small Investors'.
Currently, when most companies list shares on the London Stock Exchange, they offer them exclusively to institutional investors at an agreed price.
As a result, private investors can only get a slice of the action once dealings in the shares commence.
Often, it means they have to pay more for their shares because many new issues start trading at a hefty premium.
PrimaryBid believes a slice of all new share issues should be made available to private investors. It says retail investors are often treated as 'second-class citizens'.
Lee Wild, head of equity strategy at wealth manager Interactive Investor, agrees.
He says: 'Retail investors have been stranded in the IPO wilderness for too long, often left to pick up the scraps once City institutions have got the cream.
'But things are changing, and retail investors should expect to participate on equal terms as pressure increases on companies and their advisers to add a retail element to every stock market listing.'
If you would like to back our Fair Play For Small Investors campaign, register your support at publicinclusion.co.uk.