Hundreds of years, London’s stock market has become the basis of global finance and British economy. The beginning can be driven out of the royal exchange because the violent stock broker is loud and poor, and instead settles in a coffee house in the city, then dates to the 17th century. The main meeting is the Changlate Jonathan coffee house where they began to publish the list of stocks and products. Eventually, it became the London Stock Exchange (LSE).
However, recently, LSE has been concerned that he has rapidly lost his position as a global center to procure new capital, and is characterized by the remove list and the famous IPO SNUBS flood. I have endured for a few years.
Despite the plan of the British government’s capital market reform, half (53 %) of the FTSE 350 corporate committee, which was investigated in full -scale reports in the UK and Irish officers, decreased in the next five years. I believe. -Ristaling and its international status worsening. He said that the stock market was set for recovery, only one -third (31 %).
In 2021, London was the largest center of the world’s largest IPOs, not the United States and China, and welcomed more than 120 companies to the British market. So what happened?
Where did it work?
Brexit and subsequent political turmoil, many investors have encouraged them to withdraw money from the UK. Others argue that the status of LSE has been slowly eroded for decades, thanks to regulatory disadvantages and the change in the global market dynamics.
“Other exchanges around the world have been revolutionized innovation quickly and benefit from local cultural support and temporary regulations that support their growth,” said the ICMA Center’s finances and risk management. Professor RADU TUNARU says.
According to Tenaru, the increase in competition with overseas stock exchanges has worsened due to LSE’s self -satisfaction. “It was estimated that the status alone was enough. Unfortunately, this was not the case.”
The British regulation framework is partially responsible. The pension fund was once one of the largest buyers of British shares, but the strict regulations were more risk -avoidance culture due to the 1991 mirror group scandal, when thousands of workers lost pension benefits. I urged it. In a 1997 British pension system, 73 % of assets were assigned to shares, according to reports from the New Financial, a think tank. In 2024, the numbers were 31 %.
LSE needs to determine how much the deterioration of the reporting standards will be accepted.
George Lagarias, the FORVIS MAZARS chief economist, claims that the London’s listing slump is more prominent than most countries, but a larger global trend in London. The world’s IPO market has slowed over the past two years in inflation and volatility caused by war in Ukraine. “The British stock market is hardly possible because it is affected by geopolitical headwinds,” he says.
A wider market trend has also contributed to the decrease in LSE. Private equity is an attractive alternative to the public list. Private companies have less restrictions and are freely operated from public eyes. Their investors also have a deep pocket. Last year’s 4.3 billion pounds of dark trace take -and -private is considered to be one of the successful successes of British great technology, indicating the willingness to exercise wealth for appropriate goals.
In reality, the British economy is struggling. According to a new EY report, one of the five companies listed in the UK warns investors about the sudden drop in profits last year, emphasizing the rise in pressure on companies as the cost rises.
Knox Mcilwain, a FinTech company’s regulation and license, thinks that companies are leaving the company away from LSE, leaving DROVES from LSE due to the slowdown of economic growth and intensifying competition. “Many people are heading to the US market. Nasdaq boasts a famous technology story,” he says. This was recently promoted by the promise of Trump’s deregulation.
Amazon, Apple, and Tesla are one of the “magnificent 7” shares that have been super charged in the US stock market. In comparison, British Blue Chip companies do not provide gorgeousness and charm. London exchange is struggling to catch up with S & P 500 because the listing committee has no major technology companies.
TENARU emphasizes the excess representatives of LSE’s old economy. “Comparing the top 10 companies of S & P 500 and FTSE 100 companies, entrepreneurs will prefer listing the company with Apple, Microsoft, NVIDIA, etc.. , United Health & John Son, HSBC, Astra Seneca, Graxos Misklin, Diagio, BP, British American Bacco and Barik Gold?
That does not mean that LSE is dead. Since then, many of these British shares, including NATWEST and Rolls-Royce, have returned twice as much as the US index. On January 20, FTSE 100 was closed over 8,500 points.
Is there any recovery on the horizon?
There are signs that LSE has not been done yet. The recent success of FTSE 100 is a hint on changing awareness of British investment under the new government. Shain, a first fashion giant, plans to have billion pounds in the mid -2025 London IPO. On the other hand, the deterioration of inflation and the rapid increase in M & A activity provide further hope for the LSE revival.
However, David Beech, a CEO of Knights registered in AIM, said, “The basic problem of LSE is that it has been separated from the company’s performance. Almost four years, money is the market. He is leaving, “he explains. As a result, even if the company is working well, it will be a market for sellers with too few buyers.
It was presumed that the status alone was enough. Unfortunately, this was not the case
“At some point, investment is back, but we can’t just sit and wait for it to happen,” he says. “If the current situation continues, the market may be too thin, especially in the AIM market, the less the listed companies are not enough.”
The British government is eager to end the RSE listing system last year to simplify the IPO process, and end the “crisis era” regulation. However, some people, including the beach, argue that these changes alone will not encourage companies to float in London. The city must also provide enhanced incentive, global talent, and more friendly tax systems for research.
Others are concerned that the workers’ plans to register the British stock market are too much. “In the next few years, LSE needs to determine how much compromise on reporting standards will be accepted,” Lagarias says. “Will it deal with the United States in competition for more business, or wait for those who maintain higher standards and decide to list the next crisis? Is it?
In the 300-year existence, LSE has endured many unstable events, from Black Monday’s stock market collision to the 2008 global financial crisis and COVID-19 pandemic. I was attacked by a rocket during World War II. The complete recovery from this latest set may seem unlikely, but that is not impossible.
