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By HUGO DUNCAN

Updated:

Peel Hunt hailed fresh signs of life in the City as market conditions ‘improve’ and investor confidence proves ‘increasingly resilient’ in the face of global uncertainty.

As anxiety over the health of the London stock market spreads through the Square Mile and Westminster, it enjoyed ‘a strong start’ to its financial year.

The investment bank’s revenues for the three months to the end of June were ‘comfortably ahead’ of the same period last year, lifting its shares 5.4 per cent, or 5p, to 98p.

The upbeat tone is particularly notable because Peel Hunt has been vocal in raising concerns over an exodus of firms from the stock exchange.

On Wednesday, it said the UK was on course for ‘the biggest year of takeovers since 2021’ after a flurry of merger and acquisition (M&A) activity in the first six months.

Many bids have come from private equity and the US as bargain-hunting predators swoop on undervalued firms in London. 

Upbeat: Investment bank Peel Hunt said it has enjoyed 'a strong start' to its new financial year

At the same time, London has been rocked by defections to other bourses, with reports this week suggesting AstraZeneca – the UK’s largest listed company with a value of £162billion – could move its listing to New York.

A lack of new listings through initial public offerings (IPOs) means that these companies are not being replaced, sparking fears of decline.

But at the annual general meeting yesterday, Peel Hunt bosses, led by chief executive Steven Fine, said: ‘We have had a strong start to our new financial year as market conditions have begun to improve. 

'Whilst the macroeconomic background is hard to predict, investor confidence appears to be increasingly resilient.’

It highlighted ‘higher revenue generation’ across key arms of the business and added: ‘We have a strong pipeline of M&A transactions, with a number of situations announced and in process.’

However, bosses expressed fresh concern about the lack of new listings, which form a key revenue stream. Set up in 1989, Peel Hunt now acts for 55 FTSE 350 companies.

£662m US fund exodus

Investors pulled money out of US-focused equity funds for the first time in six months in May amid Donald Trump’s tariff chaos.

Some £622million was withdrawn, including a record £303million from smaller US firms, Investment Association (IA) data showed.

UK equity outflows fell to £354million – the lowest in nearly four years of dismal performance for the London market – and European funds recorded inflows of £435million.

IA market insight director Miranda Seath said: ‘This shift in sentiment benefited sales to European equity funds, where European stocks have performed well in 2025, and helped stem outflows from UK funds.’

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