Tim Linacre, the chief executive of capital markets at Lazard, the investment bank which recently bought brokers Panmure Gordon, said: “There is appetite for good quality companies without a doubt, but institutions are being very selective so advisers are having to be careful Institutions are being very straightforward and severe. The activity is expected to increase as the year develops, making 2004 almost certainly the busiest year for floats since the height of the boom in 2000. According to LSE figures, there were just 17 floats in the whole of 2003 on the main market, with a value of £4.7bn, while AIM saw 66 IPOs in 2003 with a total of £1.6bn.Brokers believe that institutions are showing a renewed appetite for good quality companies but are far more discerning than in the previous technology-led IPO boom. OHM, a new oil exploration company, also said it would proceed with its £30m flotation, while on Wednesday Civica, another technology company, said it planned to float with a value of £79.2m.There is now a growing list of companies preparing to come to the market with nearly 40 companies already planning IPOs, both on the full, official list of the London Stock Exchange (LSE) and on AIM, the LSE’s junior market.

The shares closed the day at 246.25p revealing strong demand. At the same time Eircom, Ireland’s biggest telecoms group, announced plans to float on the London market in the first half of March, raising at least ¤300m and valuing the business at ¤3.5bn, including ¤2.2bn of debt. A flood of stock market flotations was predicted yesterday by brokers after three companies made highly bullish announcements regarding initial public offerings (IPOs).
Cambridge Silicon Radio (CSR), the technology group, announced it had raised £78.7m from its IPO with shares being priced by broker CSFB at 200p, at the top of its 160p-200p range. But he hasn’t.”He added that he thought his three-year programme was the best way to maximise shareholder returns.”The strategy of just sitting on the shelf and tarting yourself up does not guarantee shareholder value because there might not be a buyer,” he said.. Lloyds TSB has been blocked from buying its smaller rival and it is likely that other members of the Big Four would meet a similar fate at the hands of the Competition Commission.Mr Arnold said: “If Fred [Goodwin, the chief executive of Royal Bank of Scotland] could, he would.

Its trading profit from personal financial services fell 16 per cent to £1.02bn. Its margins shrank – and Abbey warned they would continue to shrink – as it sliced the price of its mortgages to try to gain ground on its competitors.Mr Arnold, an investment banker by training who used to work at UBS, is widely thought to be trying to get Abbey into as good shape as possible so that a larger competitor might buy the business.But that would be difficult under the UK’s current competition regulations. We have laid a huge amount of foundations, but none are visible above the ground. This year we are trying to deliver some visible evidence that it is all coming together,” Mr Arnold said yesterday.He added that the second half of 2004 would be “crucial” because that was when he and Mr Hester had briefed the City that Abbey’s “supertanker” of problems of the past would begin to turn around and there would be a pick up in revenues. The duo have said real momentum will not be in evidence until 2005.Analysts said Abbey had a long way to climb. Last year it discovered a massive black hole in its wholesale banking business and also realised that its provisions in its life arm, which included a substantial number of policies with guaranteed pay-outs, were too weak.Luqman Arnold, appointed as chief executive in 2002, has embarked on a three-year turnaround programme, hoping to reinvigorate the bank by focusing entirely on core personal financial services.Last year saw Abbey, which has dropped the word National from its trading title, sell £48bn of non-core assets, slash costs and begin to retrain staff to offer what Mr Arnold described as “open and honest” advice to customers.”We are entering an awkward phase.

But he added that the picture was still “pretty foggy” because the FSA was still consulting on the detail of the regulatory change.As a consequence of the uncertainty, Mr Hester said he had become more cautious about a possible pay-out to shareholders following the sale of its corporate loans book and other businesses which fall outside Abbey’s new strategy of being a pure retail bank. Standard Life, Britain’s biggest mutual, became the first insurer to be affected by the initiative last month, and has been forced to sell £7.5bn of equities and slash bonuses in order to boost its own reserves.Stephen Hester, the chief operating officer of Abbey, said the extra £373m was the best estimate the bank could make as to how much it needed under the new rules. The move disappointed analysts, who had pencilled in a special dividend next year.Abbey’s loss for the 12 months to 31 December was an improvement on 2002, when it went £947m into the red. Abbey National yesterday became the second high-profile casualty of the Financial Services Authority’s new regulations for life insurance, revealing that it has had to make a £373m provision to bolster its reserves.
The provision helped to drag Abbey to a pre-tax loss of £686m for 2003, which disappointed the City, sending its shares tumbling nearly 12 per cent to 485p.The Financial Services Authority wants all financial institutions with life businesses to move during the course of this year to a new, “realistic”, basis for calculating solvency. The so-called “heavy lifting group” of rail and transport department officials, which has been looking at ways of tiding Network Rail over, is due to put final proposals to the Treasury today..