Research from investment bank Numis revealed that despite volatility, Brexit and other issues, UK corporates are upbeat about the long-term prospects for the UK market.
One hundred and fifty FTSE leaders, or UK-listed company directors, surveyed in the research, expressed “exceptionally high” confidence in London, with 92% of all respondents agreeing that the UK remains an attractive market for launching an IPO or raising capital.
The research found 90% of FTSE leaders at UK-listed companies expect London’s competitiveness to rise over the next three years, while 92% believe the Financial Conduct Authority’s latest proposals on UK listings would be helpful for the market. The majority of respondents agreed (91%) that channelling pension capital into the UK market would improve valuations, encouraging IPO activity. Moreover, 75% expect pension funds to increase their allocation to UK equities in the next two years.
There was also consensus (94%) that UK and European private companies would choose London or European markets as opposed to the US when it comes to listing due to various factors, including the mixed performance of UK and European companies listed in the US market.
However, 95% of those surveyed are concerned about the “watering down” of the London Stock Exchange’s listing rules and standards and the possible impact this could have on tarnishing London’s reputation.
Despite consensus on the overall market appeal of the UK, respondents were split on improving its attractiveness as a listing venue; 38% highlighted the need for a more competitive executive remuneration environment, and 32% a less rigid corporate governance regime.
In Europe, London is the largest exchange by total market cap, at £5 trillion and by number of issuers, at 1,929.
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