Britain’s stock market has fallen below Oman and Malaysia in global rankings for new listings as the challenges facing the City intensify.
According to Bloomberg data, companies listing in London have raised $1 billion (£790 million) this year, marking a 9% decrease.
This downturn has caused the UK to drop four places in the worldwide league table for fundraising through initial public offerings (IPOs) this year, positioning it in 20th place—$40 billion behind the United States, which remains the leading funder.
London has been surpassed by Oman, where IPO fundraising exceeded that of the UK despite Oman’s stock market being only 1% the size of Britain’s. Additionally, Malaysia and Luxembourg have moved ahead of London, which now trails behind Australia, Poland, and Saudi Arabia.
No listings from the City featured among the top 100 globally, with Greece, Sweden, and South Africa hosting larger IPOs this year.
George Chan from the auditing firm EY commented, “Governments are making every effort to attract more companies, which has intensified the competition.”
He continued, “If we don’t transform this environment, it will take a significant amount of time for the UK to regain its leading position.”
London was once a consistent presence among the top five global venues for raising investment through IPOs. This year, twelve companies went public in London, with the largest raising over £150 million.
However, major private sector players remain skeptical about the stock market. Nikolay Storonsky, CEO of online bank Revolut—the UK’s most valuable fintech startup—previously stated that listing in London was “not rational,” arguing that the UK “can’t compete” and is “much worse” than the United States due to stamp duty taxes on share transactions.
Stamp duty fees, applied when shares are bought and sold, have been criticized for diminishing the competitiveness of the London stock market.
Alastair King, the Lord Mayor of London and head of the City of London Corporation, criticized stamp duty taxes on shares earlier this month.
Meanwhile, Bloomberg data reveals that 45 companies have left the UK’s stock exchange this year through mergers and acquisitions, the highest number since 2010.
Private equity firms have been attracted to the London market’s low valuations. This year, KKR completed two acquisitions of London-listed companies, purchasing Smart Metering Systems for £1.3 billion and IQGeo, a provider of network management software for utilities, for £333 million.
EQT AB also finalized two deals, while Brookfield Asset Management, CVC Capital Partners, and Fortress Investment Group are privately acquiring UK companies.
Liad Meidar of Gatemore Capital Management stated, “There’s a malaise in the UK—the state of capital markets is negative.”
He added, “Global investors can access the US market, and capital is consolidating there.”
