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businesses are turning their back on the
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UK's capital markets they're saying no
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thanks and goodbye to the London Stock
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Exchange as they seek more dynamic and
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attractive markets elsewhere the figures
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are stark the consequences profound so
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can anything be done to reverse this
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decline welcome to the week in business
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May another day another London listed
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business saying to the London Stock
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Exchange on Monday drug maker Invido
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announced it will abandon its London
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listing and focus on the US after
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reviewing its structure and considering
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liquidity issues and the costs
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associated with the UK listing now to be
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fair this is a heavily US focused
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business 80% of its revenues is
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generated by its US business and it's
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reached a point where severing ties with
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the London market and focusing on the
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NASDAQ makes sense but whatever its own
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reasons it joined a long and growing
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list of businesses turning their back on
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the UK market a staggering 88 firms left
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the UK stock market last year including
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Dark Trace Patty Power owner Flutter
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Just Eat Ashdead Arm Holdings and TUI
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the total number of departures had a
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combined market capitalization of around
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200 billion quid gone meanwhile just 18
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new listings took place every business
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left for their own reasons some were
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taken private some shifted to other
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capital markets entirely very often New
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York and some gave up their London
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listing while retaining a market
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presence they had established elsewhere
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but collectively these departures speak
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to major issues with the overall health
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of the UK equity markets and by direct
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extension the health of the UK economy
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and the attractiveness of our business
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environment firms abandoning the London
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market point to the administrative
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burden complexity and costs associated
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with a UK listing while very often
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highlighting the deeper pool of
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investors simpler rules and improved
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liquidity on other exchanges the simple
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fact is that the London market is
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dominated by what people call the old
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economy mining companies oil and gas
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firms and the fast growing tech and
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fintech giants of the future are simply
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not drawn to the London market in their
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quest for growth capital just this
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morning one of the UK's fintech darlings
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money transfer firm Wise said it would
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shift its primary listing out of London
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and into the US saying the move would
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provide a potential pathway to inclusion
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in major US indices further enhancing
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liquidity and demand for Wise shares
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adding that a primary US listing as
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opposed to a London one would
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significantly enhance its profile and
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closely align with major growth
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well here in London it's hard not to
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take that as a slap in the face firms
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are saying "We want to grow and we can't
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do it here." The trend has been clear
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for some time the Footsie 100 market
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capitalization the total value of listed
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businesses has been falling london's
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share of global equity trading has been
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falling daily trading volumes have
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fallen pension fund allocation in
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domestic equities has fallen off a cliff
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the number of analysts researching and
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covering UK stocks has declined there
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are particular reasons for all of these
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issues and we don't have time to get
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into them all here today but they
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combined to paint a picture of a market
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in decline things got so bad that for a
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while advocates of UK equity markets
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including plenty of people here in the
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city and certainly in government thought
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the savior of the London market would be
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a parl high and sell them cheap fast
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fashion giant in the form of Shien
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indeed so keen were UK authorities to
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get this listing that we nodded them
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through the early regulatory stages
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despite widespread concern over the
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company's human rights record anyway
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they're not coming to London anymore so
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who else can we pin our hopes on
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revolute unlikely ceo Nick Strsky said
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going public in the UK was not rational
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when compared to the liquidity and lower
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trading costs of the US markets monzo
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well they're talking down their
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prospects of an IPO right now zilch
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perhaps i mean any of these would put a
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spring in London's step but until an IPO
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like that actually materializes and
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unless any such move heralded a genuine
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reawakening of the London market the
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story remains one of decline there are
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plenty of task forces summits reports
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reviews and reforms aimed at tackling
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this problem but there's no silver
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bullet we need more retail investing we
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need to scrap the tax on share trading
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we need pension funds to rediscover an
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appetite for UK equities and we need a
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culture that nurtures and celebrates
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growth risk and investment we need to
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appreciate that despite London and the
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UK's many assets competition is fierce
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and we are in danger of falling out of
4:48
the race in capital markets money talks
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and right now its message to London is
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loud and clear that's it from me this
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week stay up tod date and in the know
4:58
with the city app and on cityam.com and
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I'll see you next week
