Another week brings another warning sign for the City. This time it comes from a City A.M. report^, which reveals how trading platform IG Group has launched a “Save Our Stock Market” campaign, urging policymakers to take action before London’s public markets lose further ground.
The capital’s exchanges have been steadily hollowed out. Last year, 88 firms either delisted or moved their primary listing elsewhere, the biggest exodus since the financial crisis. These weren’t obscure names. Arm Holdings, Flutter, Darktrace and now Wise have all chosen the US in search of deeper capital and higher valuations. Shell and Unilever are also reportedly considering a move.
More alarming is the shift from institutional investors. Scottish Widows, one of the country’s largest pension funds, is cutting its UK equity exposure from 12 per cent to as little as 4 per cent in its growth portfolios. That isn’t a rebalancing. That’s a signal. If long-term domestic investors don’t see value in UK-listed companies, it’s hard to argue the market is healthy.
Stamp duty on share purchases continues to weigh on sentiment, despite bringing in £4.4 billion last year. Critics argue it punishes retail investors and distorts behaviour. IG calls it a “self-inflicted wound”, and it’s difficult to disagree when peer markets have no such tax burden.
The government is pushing pension funds to invest more in UK private assets through the Mansion House Accord. But capital isn’t unlimited. To increase private equity exposure without raising overall risk, something else has to give, and UK-listed equities are taking the hit.
Neil Wilson at Saxo pointed out that domestic equity exposure has fallen from 50 per cent to 4 per cent in the past 25 years. That’s not just market evolution. It’s market retreat. And without serious reform, it’s likely to continue.
London’s stock market doesn’t just need saving. It needs to be made worth saving. Until then, expect more exits, fewer listings and another round of handwringing while the real money flows elsewhere.