It Is Not Yet Time To Revive The City
Times Business has sent out an email suggesting that it is Time To Revive The City – and be bold.
Like many things in life today one can assume that the opposite will happen, and perhaps rightly so. The London stock market has been taking it in the neck for decades, firstly as a result of the success of AIM in the 1990s and 2000s, and then after all the tax and regulation took hold, competition from other stock markets and something which people do not mention enough, from cryptocurrencies.
After all, why take a punt on a penny stock, which could take years to go nowhere, when you can take a punt on a crypto with a funny name. Of course, Bitcoin is the best example. Unlike most UK stocks, cryptocurrencies can actually move, and have massive moves in both directions.
Then there is the experience of being a listed company in London. Apart from the cost, the hassle, and glory of having a ticker code, there is the irony of positive RNS announcements not being believed by the market, even though they go through multiple, and expensive verification.
In contrast, any swivel-eyed psycho with a keyboard has free rein to defame / mudsling small companies, knowing full well they do not have the time or money to take legal action. Indeed, the mudslingers magically only attack companies with a market cap of under £50m, who they know do not have the capability to fight back against shorting friendly comments.
It is also worth mentioning the service providers that listed companies have to use, and pay through the nose for. Rather than being supplied by the exchange, perhaps in the form of a subscription, the lawyers, auditors, accountants, PR, insurance, all have to be paid for.
Once again, as the reaction to many RNS announcements underlines, companies release their results, and after all the water under the bridge, many on the London market do not even believe what they are reading.
Therefore, despite the good wishes of The Times, it can be seen from the above paragraphs, the London stock market is in such a poor state, it would be easier to start again, or even start a new stock exchange, than fix the current set up.
In the meantime, we are still waiting to it rock bottom. Anyone who remembers the 1970s will know that things can get a lot worse than they currently are.
This Week’s Risers
Although the days between Christmas and the first Monday back to work in January are notoriously difficult to negotiate, the market at the small cap end did appear to have some decent movers. Hopefully, this is a positive sign for 2025. That said, a not insignificant number of the risers were companies who have recently announced their intention to delist, for instance, Scholium (SCHO).
This always gives me the impression that the rise is due to long term shorts in the stock covering their position, although maybe this is a kind of wishful thinking. As far as stocks rising on no fresh news, the way was led by Hornby (HRN), Fusion Antibodies (FAB), and Verici (VRCI).
In contrast, there was a positive reaction to Pulsar Helium (PLSR) announcing a fundraise ahead of an imminent drill campaign, and one presumes that the latest rebound in CAP-XX (CPX), is the result of the market looking forward to fresh news regarding orders, as hinted at in the November update. Insig AI (INSG), rose well as the market may be assuming further new business wins in the currently hot AI analytics of data space.
Disclaimer & Declaration of Interest:
The information, investment views, and recommendations in this Zaks Traders Cafe interview are provided for general information purposes only. Nothing in this interview should be construed as a promotion or solicitation to buy or sell any financial product relating to any companies under discussion or referred to or to engage in or refrain from doing so or engage in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the commentator but no responsibility is accepted for actions based on such opinions or comments. The commentators may or may not hold investments in the companies under discussion
