European and UK Equity Capital Markets Review November 2025

• Global equity markets sold off over the first 3 weeks of November but a recovery into month end resulted in overall performance in November being little changed. Over the course of November, the Stoxx600 rose 0.8%, S&P500 rose 0.1%, whilst the Nasdaq fell 1.5% - the less technology exposed Equal Weighted S&P500 rose 1.7%. Meanwhile, the US smaller cap Russell 2000 rose 0.8%. In Japan, the Nikkei fell 4.1%, however this was following a rally of 16.6% in October. Changing commentary from the Chancellor and investor uncertainty with respect to the UK November Budget saw UK indices also relatively flat for the month, with both the FTSE100 up 3bps and FTSE250 down 3bps over November and the IHT exposed AIM index down 1.7%.
  
  
• Concerns about a growing AI ‘bubble’ that were evident in October, spilled over into November, with 45% of fund managers in the November BAML survey viewing an AI bubble as the largest tail risk for global equity markets, up from 33% in October, Indeed over 50% of fund managers were of the view that AI stocks are in a bubble. Additionally for the first time since August 2005, a net 20% of fund managers believe companies are overinvesting; driven by concerns over the magnitude and financing of the AI capex boom. Coupled with news of Michael Burry’s short on Nvidia, and a sell off in Nvidia despite decent results, investors are wrestling with extended valuations and heavy investment, but still struggling to meaningfully decrease their positions for fear of missing out on returns.
  
  
• Market volatility was elevated for the first c.3 weeks of November, this was driven by a combination of factors – AI bubble worries, private credit concerns, a lack of US data given the longest Government shutdown on record and the Fed talking down the prospects of a rate cut at its December meeting next week. Towards the end of the month some of these concerns seemed to ebb with the US Govt. re-opening and more dovish commentary suggesting that rates may well be cut in the US by year end.
  
  
• The main topic of note for UK markets was the highly anticipated UK Budget. After an initial period of volatility following the OBR’s unintentional early release of its Economic and Fiscal Outlook (EFO) revealing its forecasts and policy measures, gilts enjoyed a sustained rally on the day. Sterling also rose and UK equity markets finished the day higher. Whilst the market viewed the Chancellor’s £22bn of fiscal headroom as positive news, the impact of the “smorgasbord” of tax measures remains an unknown with some risk of additional political fall out. Gilt yields have subsequently moved marginally higher, but this has been in keeping with a global drift upwards, rather than anything domestic.
  
  
• UK interest rate markets currently price in a 92% probability of a cut from the BoE this month. However the Budget actually had little impact on pricing, instead it was November's MPC meeting and the emergence of Governor Bailey as the swing voter which has moved markets. In the US, expectations of a rate cut next week are also growing, following weaker than expected labour market data (delayed following the government shutdown) which showed the unemployment rate rising to 4.4% in September, above consensus and the previous months forecast of 4.3%. Downward revisions to July and August non-farm payrolls of 33k, meant there was a net fall in jobs of 4k in August. Further adding to expectations of a cut were dovish comments by NY Fed President Williams, important given that his views typically align with Chair Powell.
  
  
• After a string of European IPOs in October, whilst ECM activity remained relatively buoyant in November, volumes were skewed to Accelerated Book Builds as elevated volatility and the wind down to year end saw fewer IPOs in November. There was $10.7bn of ECM activity in November, a 98% increase on November 2024 ($5.4bn). Over a third of this month’s ECM activity came from the UK, with deals including a $2.6bn primary ABB of SSE, an $88m sell down of Bridgepoint by employees and related persons and an accelerated offer for Helios Capital Partners’ remaining $84m stake in Helios Towers.
  
  
• The $2.6bn primary ABB of SSE was part of a fully funded £33bn investment programme for 2026–2030, including around £6bn of expected dividends, taxation and other cash requirements. The market welcomed the news, with SSE shares up nearly 17% on the day of execution, having already risen 4% the day before launch given leaked news over the prior weekend of an SSE fundraising. A large amount of reverse enquiry led to books being formally covered within 15 minutes of public launch and is another data point indicating strong investor support for UK companies looking to invest in their businesses.
   

• Equity markets stumbled in early November as concerns of an AI-driven market bubble and a tightening in liquidity saw a sell off across global indices, the largest since President Trump’s “Liberation Day” earlier in the year. Fear of private credit as the next source of a systemic credit event continued to be a narrative in the headlines, with the “merging” of two funds by Blue Owl in the face of accelerating redemptions sparking a dramatic response. Additionally, news that Michael Burry was short Nvidia sparked a debate over AI valuations and focused investors attention onto the amount of capex being spent on AI infrastructure, combined with concerns over the lack of visibility on US data brought on by the government shutdown saw heightened investor nervousness. This is however gradually improving with US agencies beginning to return to regular publication schedules.
• For the UK, the Budget introduced a plethora of uncertainty to markets. Chancellor Reeves gave an atypical speech on 4 November where she heavily suggested manifesto-breaking tax rises would be required, followed by market chaos on 14 November when headlines reported that the Chancellor would not in fact be raising income tax rates at the Budget. This saw a sharp sell-off in gilts as markets questioned Reeves’ commitment to fiscal sustainability, which was only calmed by reports that the reason for the change was due to improved OBR forecasts which had reduced the size of the fiscal hole.
• In the UK for November, the more internationally exposed FTSE 100 outperformed its more domestically focused counterparts finishing the month up 3bps, the FTSE 250 down 3bps, the FTSE AIM100 down -1.7% and FTSE Small Cap down 0.4%. Elsewhere in November, the Stoxx600 was up 0.8%, S&P 500 up 0.1%, Nasdaq down -1.5% and Russell 2000 up 0.8%.
   

• Having trailed their European peers for much of the year, the subsequent recovery for US stocks has seen US equity valuations rise, driven by a strong performance of 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.
• Whilst UK equity market valuations do trail those in the US, adjusting for growth it is arguably down to fewer higher growth opportunities rather than an inability to value growth that drives the differential.
• A large part of the valuation differential across geographies can be attributed to large cap Tech valuations. As can be seen in the latest BAML fund manager survey concerns about AI driven Tech valuations remains the top ‘tail risk’ for investors, but investors are hesitant to reduce their exposure too far for “fear of missing out” (FOMO).
• 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 FTSE 250. Despite this improvement, as at the end of October, the FTSE All-Share still sits at a 42.9% discount to the S&P, and a 24.3% discount on an equal weighted basis (at a headline level).

• UK CPI inflation remains higher than other regions, but fell to 3.6% y/y in October from 3.8%, albeit higher than consensus calls for 3.5%. Service sector inflation decreased to 4.5% from 4.7%. Core dipped to 3.4% from 3.5%, in line with consensus.
• Eurozone inflation held steady at 2.2% in November, as did core at 2.4%. Due to the government shut down, the US CPI report for October was cancelled, and as such the next release will be the November report released on 18 December, post the next Fed meeting. Therefore September remains the latest data available, where CPI ticked up to 3.0% y/y from 2.9% in August, whilst core dipped to 3.0% from 3.1%.
• At its latest meeting, the ECB maintained the Deposit rate at 2% noting that it felt monetary policy was well suited to the current economic environment. In the UK, November's MPC meeting saw rates kept on hold. But the vote was split 5-4, the Governor representing the swing vote. However his comments in the minutes suggest he is open to cut in December subject to data. As such markets now expect a 25bp cut on the 18-Dec.
• Given recent dovish comments from key Fed officials and the uptick in unemployment markets now fully expect a cut this month, the curve pricing in a 98% probability of a 25bp cut at the time of writing.

• The November BAML fund manager survey showed a continued improvement in investor sentiment to the most bullish since February however full bull sentiment has been tempered by growing concerns of a private credit event and an AI bubble.
• A net 77% of respondents expect stronger European growth over the coming 12 months, the highest since mid-2021, with a net 3% predicting a stronger global economy over the next 12 months, the first positive reading of the year. Monetary easing was deemed to be the biggest driver of this swing. Investors continue to remain cautious to the tail risks with an AI bubble viewed as the primary concern, followed by a disorderly rise in bond yields and a second wave of inflation.
• The UK Budget, 26 November, had introduced a couple of months of uncertainty to the UK market, but has been taken positively in the days since.

IPO issuance in Europe

• US$707m raised from 7 IPOs in November 2025 across Europe, with an average deal size of US$101m. There were 5 IPOs greater than US$50m including UK entertainment business Winvia Entertainment (US$53m), Turkish investment company Vakif Faktoring (US$75m), Norwegian live production company Appear (US$94m), Turkish REIT Pasifik Holding (US$142m) and Russian financial institution DOM.RF (US$310m).
• There were two smaller Italian IPOs which raised less than US$50m.
• There were four IPOs over US$1bn in 2024, and have been three IPOs over US$1bn in 2025 with Verisure the largest IPO of 2025 at US$4,176m, surpassing SMG’s IPO of US$1,136m (September 2025). This does not include Rosebank.
• So far in 2025, most core European IPOs have traded higher post issue with those pricing since April up 20.1% on average post pricing. This has provided investors with a positive return and created a constructive ‘feedback loop’ for those issuers looking to come to market over coming quarters.
• 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 225^th).

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)}