The success of a string of technology flotations in the US has raised hopes that the technology new issues market will enjoy a similar renaissance in the UK.

In spite of stock market volatility, the US has seen several notable initial public offerings by technology groups. VMware more than doubled in value in its first two weeks after its debut this month, while Limelight Networks and Data Domain both registered double-digit gains on their opening days of trade in July.

UK technology companies have been slower to come to market this year. Those that have include Xchanging, the business process outsourcing group, and Sepura, the telecommunications equipment maker. Both made solid debuts and their shares are up on the issue price.

Bankers and investors are optimistic that the final months of 2007 will see activity pick up in the UK, with a raft of medium-sized listings expected to come to market.

Sophos, Lovefilm, Smartstream Technologies, and TelecityRedbus are thought to be considering flotations this year. Each could command a market capitalisation of 400m-£600m.

If they went ahead, it would mark the reversal of a depressing trend for the number of UK technology companies going public. Main-market listings have been sparse since CSR,Wolfson Electronics, the semiconductor maker, and Micro Focus, the software maker, floated in 2004. The largest technology listing in London in the past three years was Sitronics, the Russian telecoms equipment firm.

The sector has since polarised. There has been a plethora of listings on Aim with market values of less than £350m. At the other end of the scale, companies such as LogicaCMG, ARM Holdings, SageMisys and Autonomy command market capitalisations in excess of £1bn.

If anything, the listed sector is shrinking. Merger and acquisition activity has been buoyant: Xansa is on the verge of takeover by Steria of France for £472m; IXEurope was bought for £240m; and Phoenix IT acquired ICM Computer for £104m.

Paul Lewington, director at Close Brothers Corporate Finance, says the decision to go public will partly depend on market volatility falling. "There is plenty of supply to meet demand due to maturing assets in buy-out company portfolios, combined with three to four years of a good trading environment for technology companies."

Milan Radia, an analyst at Jefferies International, says: "Investor appetite will probably remain strong for companies with larger liquidity, longer, more established track records and good business visibility."

Mr Lewington says the credit crunch has increased the attractiveness of IPOs as an exit route for private equity investors, as secondary buy-out or refinancing options are constrained.