Chancellor meets with City grandees over London’s listings crisis
Chancellor Jeremy Hunt held talks with top City chiefs on Tuesday as part of the government’s efforts to attract more listings to the London Stock Exchange.
Morning Wire reported on Monday that the Chartered Governance Institute had sent a letter to the Treasury urging it to call an emergency meeting with top institutions to try and stem the flood of firms away from the capital’s public markets.
The chief executives of Abrdn, Schroders, HSBC, Phoenix Group and Peel Hunt, as well as Citi executive David Livingstone, attended a breakfast summit with Hunt today. Bim Afolami, the new City minister, was also present.
The meeting was convened to review existing plans to “make the UK the global capital for capital”, the Treasury said, following the Chancellor’s Mansion House reforms announced last summer.
Hunt is set to announce further measures to boost the competitiveness of UK equity capital markets in his Spring Budget on 6 March.
One option reportedly being considered is simplifying ISA products and removing barriers to investing in the stock market.
“The Chancellor spoke about how Mansion House Reforms will unlock £75bn in equity funding to help high-growth businesses scale and grow and support better outcomes for savers,” the Treasury said.
“The economic secretary also spoke about the importance of delivering the Edinburgh Reforms which will turbocharge growth in the UK’s capital markets, streamlining the listings process and cementing the UK’s status as a leading global capital markets destination.”
Just 23 companies IPO’d on the London Stock Exchange in the first nine months of 2023. This figure is down from 45 in 2022, which itself was a 62 per cent drop compared with a record 119 listings in 2021.
Some big players have snubbed the market in favour of New York, including Cambridge chip giant Arm and London-based commodities broker Marex, which filed paperwork for an IPO in New York last month.
The board of travel giant TUI has recommended delisting from the LSE to focus on its listing in Germany. Irish building giant CRH has chosen to move its primary listing from London to New York, while Flutter has opted for a secondary US listing.
A New York listing comes with the appeal of higher valuations and trading volumes, as well as access to a deeper pool of capital.