London stock trade volumes fall below expectations as Europe maintains lead
The London Stock Exchange’s average daily trading volumes (ADVs) fell below expectations last quarter, according to new research, as the City struggles with a dearth of capital markets activity and big-ticket listings.
The data from investment bank Jefferies showed European exchanges’ stock trade volumes have generally lagged consensus, slipping by some six per cent year-on-year to €37.72bn (£32.64bn).
London’s cash equities ADVs came in at £3.61bn in the fourth quarter of 2023, six per cent below Visible Alpha consensus.
This figure is up eight per cent from the previous quarter, but down seven per cent from the same period last year.
Just 23 companies IPO’d on the LSE 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.
Meanwhile, travel giant TUI said in December that it was considering 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.
New York often offers companies higher valuations and trading volumes, meaning share prices are less volatile.
London now makes less than half the monthly trades of Euronext, a pan-continental bourse with listing venues in Amsterdam, Brussels, Lisbon, Dublin, Milan, Oslo and Paris. The LSE has not traded with higher levels than Euronext since November 2018.
Euronext recorded €9.56bn (£8.27bn) in stock trade volumes last quarter, three per cent below consensus. This figure is up four per cent from the third quarter but down eight per cent year-on-year.