Dame Julia Hoggett, the CEO of the London Stock Exchange (LSE), stated that negative sentiment regarding the UK market has led to companies choosing to list their shares in the US instead of in the UK. In an interview with the BBC, she emphasized the need for the UK government to create a more attractive environment for investment in the domestic stock market to prevent firms from seeking growth opportunities abroad.
Hoggett noted that many large companies have either left the London market or are considering doing so, which could weaken the UK economy by reducing tax revenues and lowering business valuations. She urged the government to establish structural incentives to support UK businesses, echoing sentiments expressed by the Chancellor and Prime Minister.
The LSE currently comprises approximately 930 companies with a total market value of about £4.9 trillion, with nearly 40% being international firms from over 80 countries. However, several companies, including Just Eat, Tui, and Flutter, have recently delisted or relocated to other exchanges.
The number of initial public offerings (IPOs) in London has decreased significantly, with only 23 IPOs raising £2.1 billion last year, compared to 354 IPOs in the US that raised $44 billion (£33 billion). This trend has coincided with increased UK investment in US stocks in search of better returns.
Hoggett remarked on the need for British investors to have more incentives to invest in UK stocks, suggesting the removal of the 0.5% tax on UK share purchases for external Britons, which does not apply to foreign stock purchases. She also advocated for the reintroduction of tax credits for domestic investments, a scheme that was in place until 2016.
The Confederation of British Industry, a business lobbying group, has called for immediate action to address the outflow of firms from the LSE, recommending lighter regulation, improved marketing, and incentives for investors. The government has not confirmed whether stock market reform will be included in its upcoming Budget, with a spokesperson stating that tax decisions are typically announced by the Chancellor during fiscal events.