Few corks are popping in the City

The only market debuts - or Initial Public Offerings (IPO) - in the past three months have come from two venture capital firms,according to research from consultants KPMG.

But the LSE denies claims it is going through its most barren period in 20 years.

It points to the success of the Alternative Investment Market (AIM), the junior stock market for small companies and start-ups, as a bright spot in the gloom.

'Trickle' of business

An LSE spokesman said: "AIM has been doing well in very difficult conditions."

He added: "It would be unfair to say the London market is closed for business.

"There has been a trickle coming through.

"Compared with other European and global markets we are actually faring quite well."

Green shoots

Last year, the London markets saw 97 IPOs - three quarters of the European total.

Out of those 61 were on AIM - representing 45% of the European total.

When investor appetite returns it may do so quickly and the window may well be open for a limited period only KPMG research

But AIM saw just five companies join it in the past three months, raising a paltry �5.3m in total.

This time last year, KPMG was talking about green shoots of recovery in the IPO market, but it now says those hopes have been "crushed".

Success rate

Neil Austin, head of new issues at KPNG, said: "The market has been dormant since the middle of last year and shows no immediate signs of reawakening.

"Amid current economic jitters and war with Iraq, layer upon layer of uncertainty is leaving investors with a loss of appetite for new entrants."

IPOs are a good sign of the health of the economy, as well as an important source of fee income for the UK's financial services industry.

But although the market is flat, the LSE claims the success rate of those companies that do decide to go public in London is high.

Other countries

In a separate survey, also published on Monday, 80% of companies questioned said their original objectives had been achieved by going public.

But the number of IPOs is still well down on its 2000 peak of 318.

And the picture is little better in other countries.

The US has seen just five companies get off the ground this year, raising a combined total of $1.05bn.

Half that total was raised by Telkom SA, a dual US/South African IPO.

Start planning now

Mainland Europe was even quieter, with just one company, Meta Spa, listing in Italy.

The Far East provided the only bright spot, with 10 companies going public on South Korea, and eight in Hong Kong.

KPMG advised companies who wanted to go public to start planning their IPO.

"When investor appetite returns it may do so quickly and the window may well be open for a limited period only," a spokesman said.