FTSE 100 Live: All eyes on the future of the London Stock Exchange
Good morning from the City AM liveblog team.
What does the future have in store for the London stock market?
According to one theory, things will get gradually worse – fewer IPOs, declining liquidity, more and more delistings until eventually the London Stock Exchange decides to call it a day.
According to a more optimistic scenario, however, the situation experiences a turnaround and before long, firms are racing to get a chance to file for their initial public offering.
What will decide the scenario that plays out? According to a fresh report from New Financial, much will rest on the UK’s approach to pensions.
A UK weighted default fund with an allocation of between 20-25 per cent, if made a requirement for defined contribution (DC) pensions with an opt-out for individuals, would pump an extra £76bn into UK equities to rejuvenate the public market, according to the think tank’s projections.
On the flip side, however, a “do nothing” approach risks seeing DC fund allocation to the UK slip further still to as little as 3.5 per cent by the end of the decade, New Financial predicted.
So which scenario will play out? That all depends on whether Chancellor Rachel Reeves has the gumption that the markets hope she does. We’ll see whether that turns out to be the case.
Here’s a summary of our top headlines from yesterday:
- Petershill Partners blames ‘enduring valuation discount’ as it quits London Stock Exchange
- Barclays, Citi, JP Morgan bosses sound alarm on bank tax
- Farage confronts ‘dinosaur’ Bailey on Bank’s independence
- Gilt auction demand lowest in two years in sign of pre-Budget jitters
- Heseltine-founded media giant snaps up trio of marketing titles
