European and UK Equity Capital Markets Review July 2025

• July’s positive equity market performance came amidst an ‘eclectic’ mix of news flow. Markets continued to rise over the course of July with investors sanguine about the drip feed of US tariff announcements over the month, seemingly choosing to take comfort from clarity despite overall tariff levels being slightly higher than expected. A number of global equity markets reached all time record highs over the month including the FTSE 100, DAX, S&P500 and Nasdaq. The rally was tested at the end of the month as the impact of tariffs began to be reflected in the macro data although early August market performance has been more positive.
  
  
• Markets are still firmly in the green this year with larger cap stocks outperforming their smaller cap counterparts globally. Europe remains ahead YTD, albeit Big Tech has skewed US performance higher in June and July. In the UK YTD, FTSE 100 +11.7%, FTSE250 +6.5%, FTSE AIM +5.6% and FTSE Small Cap +5.4%, overall FTSE All Share +11.0%. In the US, Nasdaq +9.4%, S&P500 +7.8%, S&P500EW +4.7% and Russell 2000 -0.8%. Elsewhere in the world, Stoxx600 +7.6% and Nikkei +2.9% for the year. Over July the importance of Big Tech to overall US stock market performance is evidenced by the Nasdaq and S&P500 up 3.7% and 2.2% respectively, whilst the S&P500 Equal Weighted rose just 0.9%. At the smaller cap end, the Russell 2000 rose 1.7%.
  
  
• US markets are now increasingly concentrated, with the top 10 stocks in the S&P500 accounting for 40% of the index’s market capitalisation. In addition to this diminishing breadth at the market capitalisation level, the Top 10 stocks in the S&P500 now account for a third of overall profits. Whilst at the headline level, it appears that the recent results season has been strong, positive earning surprises have been from a low bar posed by analyst estimates. Looking more closely an unusual trend has emerged, with more than half of that have reported to date seeing profit margins decline, even as more companies report rising sales. This may indicate tariffs are beginning to have an impact on US company performance.
  
  
• There was a relatively sharp sell off on 1st August, originating from the US but percolating around the globe, as a confluence of headlines took their toll – US non-farm payrolls rose by just 73k in July, but it was the combined 258k of downward revisions to the two previous months that captured markets’ attention, marking the largest downward revision ex-pandemic. Shortly after, Trump announced he would be firing the head of the Bureau of Labour Statistics Erika McEntarfer. Trump’s interference in posts such as this is, in addition to his vocal displeasure with Fed Chair Powell and with that his demands to reduce interest rates has introduced a new vein of uncertainty, but markets have quickly recovered their poise.
  
  
• Macro releases in July included CPI inflation data for the UK and US that both rose year-on-year in June coming in at 3.6% and 2.7% respectively. Meanwhile in the Eurozone, inflation remained consistent at 2.0%. GDP data were more mixed; UK GDP contracted once again in May, falling by 0.1% on the month, representing a strong slowing relative to the 0.7% gain in Q1; the Eurozone GDP beat expectations rising 0.1% in Q2 (consensus 0.0%); and US GDP strongly rebounded expanding at an annualised 3.0% in Q2 following a decline in imports relative to Q1, when companies rushed to stockpile imports in an effort to front run higher tariffs.
  
  
• Strong performance in equity markets YTD has aided a pickup in ECM activity although in Europe we are yet to see a consistency to the recovery in IPO markets – whilst a number of IPOs did complete over the month, Autodoc and Brainlab postponed their listing plans. Despite “Liberation Day” and the significant impact on April and May’s activity, European ECM volumes for the year is currently in line with 2024 by deal value, $80.5bn (2024) vs $80.4bn (2025), and number of deals 200 (2024) vs 193 (2025) – this is reflective of the strong activity at the beginning of the year and June/July.
  
  
• Activity in July included a $2.6bn sell down by EQT of Galderma, the 5th selldown in 11 months – Galderma has been a material success story in public markets since its IPO in March 2024. There were four notable European IPOs in July, French semi-conductor manufacturer SEMCO Technologies ($54m), Spanish gambling operator Cirsa Enterprises ($532m), Belgium energy supplier EnergyVision ($50m) and Croatian agricultural company Zito ($152m). Most 2025 IPOs have performed well in the aftermarket although there have been a handful of disappointments.
  
  
• This month, Investec have continued to be active in global ECM markets – with two deals launched in July 2025. Investec were Sponsor and Joint Bookrunner on the $183m intraday ABB for Hammerson plc which is dual listed on the LSE and JSE. Investec were also Joint Global Coordinator on the $1.5bn ABB of Pepkor on behalf of selling shareholder Ibex. This continues our strong momentum from June where we were Joint Global Coordinator, Joint Broker, NOMAD and Financial Adviser for Rosebank on their £1.14bn ABB. As such Investec has led the largest M&A related primary ABB in the UK market in the last 10 years, the largest ABB in SA over the last 10 years, and the only dual listed raise between the UK and SA this year.

• European equity markets continue to outperform their US counterparts YTD, with most markets continuing to rally over the course of July, as US tariff uncertainty reduced and investors remain sanguine about their impact. US equity markets continued to close some of the performance gap with their European peers over July, with a significant pivot back into US equities over July, particularly into ‘ Big Tech’ and AI related stocks. The diversification in performance within the indices is stark, with the Nasdaq and S&P500 significantly outperforming the S&P500 Equal Weighted – it is also notable that the Top 10 stocks in the S&P500 now make up 40% of the market capitalisation of the index.
• Whilst headlines continue to be dominated by President Trump’s policy agenda, volatility has continued to subside since the peak in the days following Liberation Day. The VIX moved from 16.3 to 16.7 over the course of the month, with a mild tick up at the start of August.
• In the UK over July, the larger cap FTSE 100 outperformed its smaller cap counterparts finishing the month up 4.2%, vs the FTSE 250 which finished up 1.6%, a reversal of the trend seen in June. The blue chip index remains ahead YTD. Elsewhere in July, the Stoxx600 was up 0.9%, S&P 500 up 2.2%, Nasdaq up 3.7% and Russell 2000 up 1.7%. The performance of large cap technology names were significant in driving overall US market performance in July (as they were in June).

• The recent rally in the US has seen equity valuations recover, driven by a strong performance of US Big Tech, widening the gap with Europe. The headline valuation differential between US and UK / EU equity markets remains significant, however after adjusting for growth (and sector skew therefore...) that differential significantly reduces.
• Following the fallout from ‘Liberation Day’, global investors’ views and exposure to the US continue to evolve, with some reducing overall exposure to US equities. Whilst investors remain underweight US equities relative to history, as seen in June, over July investors continued to partially reverse some of their pivot away from US equities particularly as it relates to the technology sector.
• The solid performance of the FTSE over 2025 has started to close the valuation gap to US markets, but there is still a long way to go particularly for the FTSE250. Despite this improvement, as at the end of July, the FTSE All-Share still sits at a 42.0% discount to the S&P, and a 23.4% discount on an equal weighted basis (at a headline level).

• UK inflation for June rose to 3.6% y/y from 3.4% in May exceeding consensus estimates for a steady reading of 3.4%. Service sector inflation held steady at 4.7%. Core also ticked higher to 3.7% from 3.5%.
• Eurozone CPI data for July showed a steady inflation rate of 2.0% and an unchanged core reading of 2.3%. In the US, CPI rose to 2.7% y/y in June from 2.4% in May, the first signal in hard data that tariffs were increasing prices for American consumers, and core rose to 2.9%.
• At its July meeting, the FOMC maintained the target for US rates at 4.25%-4.50% as expected, stating that the labour market remains solid and inflation remains somewhat elevated. Following a weaker job report at the beginning August, markets are currently expecting 2-3 rate cuts by the end of 2025.
• Following cuts by both the ECB in June and BoE in May, both central banks maintained their rates at the subsequent meetings. The market is currently pricing in a 50% chance of a further rate cut in the Eurozone this year and two additional cuts in the UK by end year.

• Whilst tariffs increased uncertainty globally, with decisions now made concerns have receded and investor sentiment has risen to a 5-month high, with investors paring back from their peak bearish views in April. Recession expectations fell for the third consecutive month to net 59% saying a global recession was unlikely, and an increase in the number of investors expecting a “no landing” to 21% up from 16% and the most since February.
• It is evident European equities have continued to be net beneficiaries of improving fundamentals and a growing view amongst investors that US exceptionalism may have peaked. German fiscal stimulus and budgetary reform continue to be viewed as a core catalyst for an improving growth outlook for the European economy. The latest BAML fund manager survey indicates that a net 41% of global investors are overweight European equities, and a net 23% underweight US equities.
• Whilst the UK continues to be viewed favourably, particularly given the country’s exposure to the banking, insurance and utilities sector – the sectors most overweight by investors – the recent weak GDP figures highlight the challenge for the UK Government as it strives to stimulate growth whilst operating close to the limits of its fiscal rules.

IPO issuance in Europe

• US$822m raised from nine IPOs in July 2025 across Europe, with an average deal size of US$91m. There were four IPOs greater than US$50m.
• The July IPOs greater than $50m were French semi-conductor manufacturer SEMCO Technologies ($54m), Spanish casino and gambling operator Cirsa Enterprises ($532m), Belgium energy supplier EnergyVision ($50m) and Croatian food and agricultural company Zito ($152m).
• There were four IPOs over US$1bn in 2024, with Asker Healthcare the largest IPO of 2025 at US$1,019m, surpassing HBX Group’s IPO of US$774m.
• Recent volatility has pushed a number of potential IPO launches from H125 into H225 / 2026.
• In the UK IPO volumes are expected to be second half weighted and 2026; the two UK IPOs (greater than $50m) that have priced so far in 2025 have both traded well in the aftermarket, with MHA up 40.5% from issue price. We continue to think that the FCA Listing Rule reforms will be helpful tailwinds for UK IPOs.
• Changes to the FTSE UK Index Series will heighten the attraction of a UK listing, allowing non-sterling denominated securities index inclusion, and a faster entry threshold for larger companies (market capitalisation greater than £1bn and market position greater than 225th).

• Ibex launched an accelerated placement of 28.3% of its shareholding in Pepkor resulting in the Pepkor free float increasing to 98.2%.
• The transaction was multiple times oversubscribed at close and concluded at a narrow 5.9% discount to last close, with strong support from existing shareholders and international accounts.
• Allocations were concentrated with the top 10 largest accounts taking c.70.4% and the top 20 taking 84.7% of the transaction.
• There was significant international interest, illustrated in the c.75.2% allocation to non-South African investors.

^{Note: (1) Excluding anchor investors}

As long-standing financial advisor to Ibex Topco B.V. (“Ibex”), Investec acted as Joint Global Coordinator in the unwind of Ibex’s stake in Pepkor Holdings Limited (“Pepkor”). The final placement of c.28% of Pepkor’s current issued share capital raised R26.6 billion ($1.5 billion). This historic transaction was notably oversubscribed, continuing to highlight robust investor confidence in Pepkor's investment case.

• Hammerson PLC successfully raised 10% of its existing issued share capital through an institutional placing.
• Investec acted as a Bookrunner in connection with the placing.
• The transaction was multiple times oversubscribed at close and concluded at a narrow 2.5% discount, with strong support from shareholders, long only accounts and sector specialists.
• Allocations were concentrated with the top 10 largest accounts taking c.60% and the top 20 taking c.80% of the transaction.
• Two-thirds of the allocations were assigned to the LSE line, while one third was designated for the JSE line.
• The capital raised will facilitate Hammerson's acquisition of an additional 50% stake in Bullring and Grand Central, allowing them to gain full control of one of the UK's premier retail destinations.

^{Note: (1) As at 1 August 2025}
 

Selected Deals

^{Source: Company announcements; FactSet; Practical Law
Note: Scorecard includes competing offers and withdrawn of companies subject to the Takeover Code quoted on AIM or the Main Market. Formal sales processes are not included unless a buyer has been identified. Only newly announced offers in the month are included in the count (i.e. possible offers announced in December 2025 will be included in that month even if it becomes a firm offer in January 2025).}