A turbulent year for London’s markets… in four graphs
“There’s always light at the end of the tunnel,” said one London Stock Exchange executive in March, just after two more firms announced they were heading for the exit. “Don’t lose your head amongst all the doom-mongering.”
It is a mantra that London’s bourse has had to hold onto over the past 12 months as a barrage of negative headlines have tested even the most optimistic City watchers.
Fresh floats in the capital have slumped. Take-privates have soared. The flagship exchange has shrunk at its fastest rate ever and the prevailing narrative remains one of uncertainty.
While the numbers may look stark, reform has continued apace. The Financial Conduct Authority has shaken up its listing rules to tempt more firms to market, the government has pledged to consolidate the sprawling pensions industry to free up more capital and regulators are consulting on plans for a new hybrid stock market.
The future may be more hopeful for London’s public markets, but these four graphs show 2024 has been turbulent.
London has fallen to 20th in the IPO rankings
It is IPOs that grab the headlines and London’s year has not been a pretty one in that regard. While there has been success amid the gloom – homegrown outfits Raspberry Pi and Applied Nutrition have both performed well after floating – a look at the global rankings show London to a place unthinkable a decade ago. Oman, Spain and Luxembourg have all topped the London Stock Exchange in terms of capital raised via IPOs in 2024.
A take-private bonanza has hit the market
Alongside a dearth of fresh firms coming to market, the pace of companies being picked off by private buyers has reached record levels. Some £52bn worth of companies have struck takeover deals this year including FTSE 100 firms like Hargreaves Lansdown and DS Smith. Combined with a lack of IPOs and the market has shrunk at its fastest pace on record.
Top international firms have swapped their listings overseas
Several of London’s biggest companies have also ditched their City listings for international markets, including Ashtead, CRH and Flutter. While the moves have been struck for varied and rational reasons, the result has been the exit of a wave of London’s biggest companies. In total, £107bn worth of companies have left the FTSE 350 this year.
London broke a 41 month streak of outflows – but it’s not been a pretty year
The exodus from UK equity funds have continued this year, reaching a nadir in May as Rishi Sunak’s early election call spooked markets. Fund outflows have been at the heart of London’s troubles, forcing fund managers to sell to meet redemptions and creating a brutal self-fulfilling downward spiral on listed companies’ valuations. While there was some respite in the wake of the Budget, when investors who fled an expected capital gains tax hike returned, it has been a bruising year.