London Stock Exchange Faces Exodus as Companies Exit
The London Stock Exchange (LSE) has experienced a substantial outflow of companies in recent times, with a total of £95 billion worth of businesses departing the exchange so far this year. This trend has been driven by a combination of acquisitions, such as the takeover of DS Smith by International Paper, and listings moving overseas, such as the potential relocation of Shell to the US. Experts have expressed concerns about the future of the UK market, particularly given the loss of some of its top growth companies, such as cyber security firm Darktrace, which has moved to US private equity.
The exodus of companies from the London market has been attributed to various factors, including relatively low valuations compared to other exchanges, such as New York. Chief executives have expressed frustration with the disparity in valuations between London and its arch-rival New York, leading to a loss of confidence in the London market.
The flight from the City has reached companies from the top tier, with major players like Anglo American and Shell considering or actively pursuing moves away from the London Stock Exchange. This trend has raised concerns among city experts, who fear that the London market is losing its competitiveness and attractiveness to investors. Experts have called for measures to restore the competitiveness of the London market, such as removing stamp duty, reforming pensions, and introducing a British ISA.
The bid speculation surrounding companies like Anglo American has been dubbed “the great fire sale of London” by City commentators. Despite the headline valuation of the FTSE 100 reaching record highs, they remain below the all-time highs seen in New York. City experts believe that the London Stock Exchange is facing a crisis and is fighting to preserve the integrity of the UK market.
