If you are a potential seller but markets are moving upwards very fast then you may be tempted to wait before floating and vice versa if you are a buyer. Tom Reid, the managing director of corporate broking at Hoare Govett, says: “The real difference between 2003 and 2004 so far has been the much lower levels of volatility in the market. Volatility helps explain why there was such a dearth of floats last year The IPO calendar is split into two unequal periods. The chart on the left shows how new admissions to the stock market have slumped in recent years. If markets are falling then you might want to wait as a buyer.

Generally, volatile markets are bad for new issues.”The right-hand, bottom chart shows the broadly inverse relationship between volatility and equity issuance. One crucial element is the stability of the London stock market. Yes, they are prepared to buy share issues but you have to have a company with good prospects and those prospects need to be credible.”However, several factors are converging to make this year look like being the best year for floats, otherwise known as initial public offerings (IPOs), since 2000. But despite all the bullish noises coming out of Umbro and the dozens of other companies eyeing a flotation, stock market investors are still taking an extremely cautious view. Seasoned brokers and market watchers are warning both potential vendors of businesses, notably the private equity funds, and hopeful investors that we are long way from a return to the conditions of the dot boom.

Phil Raper, the head of UK corporate broking at Goldman Sachs says: “Buyers are being very price sensitive. They will join the likes of Center Parcs, Centaur Publishing, Eircom, Cambridge Silicon Radio and Ark Therapeutics who have already taken the plunge.The table shows 20 of the biggest and best known names that are likely to try and come to the stock market before the year is out. Names such as Saatchi & Saatchi, Pinewood & Shepperton, the film studios, Halfords and possibly Focus Wickes, the DIY retailer, could all unveil details of floats before the end of the year. Its sportswear products produced sales worth £310m last year and it is being positioned by its brokers as unusual among smaller companies for generating 60 per cent of its revenues from abroad, with its products sold in 90 countries worldwide.Umbro is far from the first company to float this year and there is a pipeline of at least 50 companies waiting to list their shares on the public markets. Umbro, the famous British sportswear manufacturer, yesterday unveiled details of a stock market flotation that will value the business at about £200m. The company’s float plans, being led by Cazenove, the City’s most blue-blooded firm of stockbrokers, is a clear sign that the London stock market is entering a new bullish phase and that 2004 could see some “float fever” return to the Square Mile. Owned since 1999 by Doughty Hanson, the private equity fund, the company has been through a five-year turnaround that produced earnings last year of £20.2m, a 180 per cent increase since 2001.