Latest news with #LondonStockMarket
The Guardian
09-07-2025
- Business
- The Guardian
Looser bonus rules and tax breaks needed to save London stock market, says CBI
The London stock market risks 'drifting into irrelevance' without government and regulatory reforms, ranging from tax breaks for stock market listings to looser bonus rules for directors, a lobbying group has said. The 20 recommendation put forward by the Confederation of British Industry (CBI), which lobbies on behalf of UK businesses, suggest financial incentives, marketing campaigns and boardroom pay are central to guaranteeing the future success of the London Stock Exchange, which has been losing stock market listings and floats to foreign rivals. 'With domestic capital shifting away from UK equities, new listings having slowed … and high-growth firms often looking overseas to raise capital, the UK stands at a pivotal moment for the future of its public equity markets,' the CBI said. The lobbying group claims that tax breaks could persuade more companies to list their shares. By making the costs of a flotation or initial public offering (IPO) tax deductible, the government would be ensuring more cash is available for reinvestment and growth, the CBI's Revitalising UK Public Markets report said. 'IPOs are time-consuming, costly, and uncertain. The lack of tax deductibility for IPO expenses reduces the net proceeds retained by companies and may deter listings,' it said. The London Stock Exchange was dealt another potential blow last week when it was reported that Pascal Soriot, the chief executive of AstraZeneca, had discussed shifting the stock market listing of the UK's most valuable listed company to the US. The report also said the UK should take advantage of uncertainty in the US, where a lack of predictable policy announcements from Donald Trump has made London a more attractive home for foreign companies' secondary listings. 'Many Asian markets are growing faster than the UK but this presents an opportunity. London can offer companies in these regions a complementary venue for additional listings, particularly at a time when any Asian companies are becoming more cautious about extra-territorial US capital markets regulation,' the report said. It comes days before the chancellor, Rachel Reeves, is to make her Mansion House speech and release the government's financial services strategy, which is widely expected to suggest reforms to Isa savings rules, pension investments, and further City deregulation to increase growth and competition. However, company rules should also be reviewed if government and regulators hope to revive the London market, the CBI report recommended. That included overhauling bonus rules for nonexecutive board members, which could encourage bosses to take more risks, it said. Nonexecutive directors are barred from receiving share options or other types performance-related pay, under the UK corporate governance code. This is to 'preserve independence and objectivity', the CBI said. However, the lobby group said restrictions around share-based bonuses 'may inadvertently encourage risk-averse board cultures'. . The CBI said that the report was based on feedback from chairs and leaders of more than 30 listed companies, including FTSE 100 firms, as well as big investment houses and advisers. Rupert Soames, chair of the CBI, said: 'Most of the challenges facing the UK equity markets are common to other markets, including the growth of private capital, the increase in passive investment funds, and investors shifting assets to US markets. 'The opportunity now is for the UK to build on the work already done to lead the world in finding innovative solutions which will once again make London attractive to companies wishing to raise capital and list their stock, and to retail and institutional investors who wish to participate in the wealth creation owning stocks and shares provide.'
Daily Mail
08-07-2025
- Business
- Daily Mail
UK markets 'drifting into irrelevance': CBI sounds alarm over decline of the LSE
London's stock market risks 'drifting into irrelevance', according to business leaders. In a hard-hitting report, lobby group the Confederation of British Industry (CBI), calls for bold reforms to revitalise the exchange. The proposals include the removal of stamp duty on share purchases – a 0.5 per cent tax that only applies to UK equities. Critics say this arrangement makes it more attractive to buy overseas stocks such as Amazon instead of investing in British firms like Rolls-Royce. Ministers are also urged by the CBI to consider encouraging pension funds to invest more in UK shares. The London market faces a deepening crisis with many of its most prominent companies being snapped up or switching their listings to New York. Fintech Wise is the latest to have confirmed such a move while recent reports suggested that even drugs giant AstraZeneca – Britain's biggest listed firm – may cross the pond. The CBI's report said UK investors are 'shifting away from UK equities' while listings have slowed, private equity predators are snapping up many businesses and high-growth firms are often looking overseas to raise capital. City grandees, government officials and regulators have been working to turn the UK's fortunes around including through changes to the listings regime. And the report acknowledged that reforms had created 'positive momentum'. But it added: 'If current trends continue unchecked, there is a risk of London's markets drifting into irrelevance, with fewer domestic champions and lower investor interest, leading to an inability to support home-grown high-growth companies.' CBI chairman Rupert Soames said that while the problems facing the UK were common to other markets, London had seen a 'far greater loss of domestic liquidity than other markets as investors have allocated their assets away from UK equities and into other markets and into bonds'. Proposed reforms include moves to reinvigorate public interest in shares, encouraging companies in Asia to have secondary listings in London, and making the cost of initial public offerings (IPOs) tax deductible. And the report raises the idea that after the Mansion House accord – under which pension funds have agreed to invest more in private UK assets such as infrastructure – a similar move might be considered to include UK shares. Another proposal – not put forward by the CBI but expected to be unveiled by Chancellor Rachel Reeves in her Mansion House speech next week – involves reducing the maximum level of cash that can be invested tax-free into Isas every year. The idea is to encourage savers to plough their money into stocks and shares instead. It is backed by many in the City but opposed by building societies who rely on the cash savings to fund mortgage lending. Soames would not be drawn on his view given the divided opinion at the CBI but made clear his wider opinion on the merits of investing in cash rather than other assets, saying it had been shown to be 'the worst possible investment'. Soames voiced optimism about the push to revive the London market. He said the London Stock Exchange together with regulators and the Government were 'getting their act together to try and bring life back into the LSE'.
Times
04-07-2025
- Business
- Times
London stock market flotations fall to lowest in 30 years
Capital raised from launching companies onto London's equity market has fallen to its lowest level in 30 years, adding to anxiety over the UK's competitiveness as a global financial centre. Just £160 million was raised via five flotations during the first half of the year, according to figures from Dealogic, the lowest since the data provider began collating the numbers in 1995. The stark figures are 28 per cent lower than the £222 million raised during the aftermath of the financial crisis in 2009, the second weakest year on record. They are 98 per cent lower than the first six months of 2021, when London saw a bumper crop of IPOs, including Deliveroo, Alphawave and Trustpilot, many of which have either been taken private or trade below their offer price. • This is precisely the wrong time to give up on the stock market The dearth of IPOs was a result of low valuations attached to companies trading in London compared with other markets, which has put off private companies, as well as 'a lack of confidence in a positive outcome, which is important because IPO processes are lengthy and expensive', Charles Hall, head of research at Peel Hunt, the investment bank, said. Investors pulling money from UK equity funds have diminished the appetite among institutions to participate in IPOs, he said. 'You don't want to put money into the market. Psychologically, it's very difficult to do when you've got a shrinking capital pool. And the other thing that's happening is … more money is going into passive investment and passives don't invest in IPOs.' However, he said that the investment bank had been having 'a number of encouraging early-look meetings with potential IPO candidates'. Fundraisings globally rose 11 per cent over the first six months of the year to $60.9 billion compared with a year earlier, led by America where $28.5 billion was raised through IPOs. The gloomy figures are the latest blow to London, days after The Times revealed that Sir Pascal Soriot, the boss of AstraZeneca, had spoken privately of his preference to move the stock market listing of Britain's most valuable public company to the United States. Rachel Reeves, the chancellor, is due to deliver her next speech to City grandees at Mansion House on July 15, when she is expected to set out the government's growth and competitiveness strategy for the financial services industry. Among the mooted reforms is a limit on the amount of cash savers can put into cash Isas each year, a move designed to encourage more people to invest instead and potentially revive the stock market.
Daily Mail
03-07-2025
- Business
- Daily Mail
'Resilient' City boosts Peel Hunt: Broker enjoys 'a strong start' to the new financial year
Peel Hunt hailed fresh signs of life in the City as market conditions 'improve' and investor confidence proves 'increasingly resilient' in the face of global uncertainty. As anxiety over the health of the London stock market spreads through the Square Mile and Westminster, it enjoyed 'a strong start' to its financial year. The investment bank's revenues for the three months to the end of June were 'comfortably ahead' of the same period last year, lifting its shares 5.4 per cent, or 5p, to 98p. The upbeat tone is particularly notable because Peel Hunt has been vocal in raising concerns over an exodus of firms from the stock exchange. On Wednesday, it said the UK was on course for 'the biggest year of takeovers since 2021' after a flurry of merger and acquisition (M&A) activity in the first six months. Many bids have come from private equity and the US as bargain-hunting predators swoop on undervalued firms in London. At the same time, London has been rocked by defections to other bourses, with reports this week suggesting AstraZeneca – the UK's largest listed company with a value of £162billion – could move its listing to New York. A lack of new listings through initial public offerings (IPOs) means that these companies are not being replaced, sparking fears of decline. But at the annual general meeting yesterday, Peel Hunt bosses, led by chief executive Steven Fine, said: 'We have had a strong start to our new financial year as market conditions have begun to improve. 'Whilst the macroeconomic background is hard to predict, investor confidence appears to be increasingly resilient.' It highlighted 'higher revenue generation' across key arms of the business and added: 'We have a strong pipeline of M&A transactions, with a number of situations announced and in process.' However, bosses expressed fresh concern about the lack of new listings, which form a key revenue stream. Set up in 1989, Peel Hunt now acts for 55 FTSE 350 companies. £662m US fund exodus Investors pulled money out of US-focused equity funds for the first time in six months in May amid Donald Trump's tariff chaos. Some £622million was withdrawn, including a record £303million from smaller US firms, Investment Association (IA) data showed. UK equity outflows fell to £354million – the lowest in nearly four years of dismal performance for the London market – and European funds recorded inflows of £435million. IA market insight director Miranda Seath said: 'This shift in sentiment benefited sales to European equity funds, where European stocks have performed well in 2025, and helped stem outflows from UK funds.'
Sky News
02-07-2025
- Business
- Sky News
AstraZeneca exit is a frightening prospect for the City and the government
It's a threat that will send a shiver down the spine of Downing Street and shake the City of London to its core.. Even the notion that AstraZeneca (AZ) - the UK's most valuable listed company - is thinking of upping sticks and switching its stock market listing to America is a frightening prospect on many levels. After all, if your biggest firm departs for Wall Street, what message does it send to an already bruised London stock market that has struggled to find its way since the UK's vote to leave the European Union? The timing of the report in The Times that Pascal Soriot, the pharmaceutical company's long-standing chief executive, is considering his own Brexit for the company, will not be lost on anyone. The Treasury is under severe strain and the Starmer government, apparently focused on compromise given its welfare reform U-turns, bruised. Ministers have been scrambling to get the support of business back, after a Budget tax raid that has added to the cost of employing people in the UK, by launching a series of strategies to demonstrate a growth-led focus. Mr Soriot's reported shift is the culmination of years of frustration over UK tax rates and support for business - though it could also remove a focus on his own remuneration as the highest-paid director of a UK listed firm. AZ has its own gripes with Labour. In January, the company cancelled a planned £450m investment in a vaccine factory on Merseyside, accusing the government of reneging on the previous Conservative administration's offer of financial aid. At the same time, it has been rebuilding its presence in the United States. That speaks to not only a home market snub but also the election of a US president intent on protecting, as he sees it, America-based companies and jobs. Donald Trump is threatening 25% tariffs on all pharma imports. 2:43 AZ has already promised a $3.5bn (£2.6bn) investment in US manufacturing by the end of 2026. It has also re-joined the leading US drug lobby group, bolstering its voice in Washington DC. There are sound reasons for bolstering its US footprint; more than 40% of AZ's revenues are made in the world's largest economy. Greater US production would also shield it from any duties imposed by Mr Trump and any MAGA successor. Since Brexit, complaints among UK stock market constituents have been of low valuations compared to peers (with a weak pound also leaving them vulnerable to takeovers), weaker access to capital and poor appetite for new listings. Wise, the money transfer firm, became the latest UK name to say that it intends to move its primary listing to the US just last month. If followed through, it would tread in the footsteps of Flutter Entertainment and the building equipment suppler CRH - just two big names to have already left. London was snubbed for a listing by its former chip-designing resident ARM back in 2023. An initial public offering by Shein, the controversial fast fashion firm, had offered the prospect of the biggest flotation for the UK in many years but that was blocked by the Chinese authorities. Efforts to bolster the City's appeal, such as through the Financial Conduct Authority's overhaul of listing rules and the creation of pension megafunds to aid access to capital, have also been boosted in recent months by investors in US companies taking a second look at comparatively low valuations in Europe. Market analysts have charted a cash spread away from the US as a hedge against an erratic White House. The Times report suggested that Mr Soriot's plans were likely to face some opposition from members of the board, in addition to the UK government. AstraZeneca has not commented on the story. Crucially, it did not deny it. But a government spokesperson said: "Through our forthcoming Life Sciences Sector Plan, we are launching a ten-year mission to harness the life sciences sector to drive long-term economic growth and build a stronger, prevention-focused NHS. "We have already started delivering on key actions, from investing up to £600m in the Health Data Research Service alongside Wellcome, through to committing over £650m in Genomics England and up to £354m in Our Future Health. "This is clear evidence of our commitment and confidence in life sciences as a driver of both economic growth and better health outcomes." Governments don't comment on stories such as these, but you can bet your bottom dollar that the departure of your biggest firm by market value is not the message a government laser-focused on growth can afford to allow.
