The London stock market is past its best and needs urgent reform to return to its former glory, a City veteran has warned.
Richard Buxton, who retired this week after a decades-long career, including stints at Jupiter Fund Management and Schroders, said yesterday that the decline of the London Stock Exchange has been ‘the tragedy of his career’.
He said pension funds and insurers have had to invest in ‘seemingly safe fixed income investments’ over the stock market due to a belief that equities are risky because they’re volatile. But he added that to ‘a long-term saver, daily volatility, and indeed daily liquidity, is completely irrelevant’.
Buxton blamed this regulation for making the City of London a less attractive place for businesses looking to go public and backed attempts by the government to reignite the stock exchange.
Chip designer Arm has announced that it will list in New York this year in a bid to secure a higher valuation, in a blow to London.
Warning: Richard Buxton said that the decline of the London Stock Exchange has been ‘the tragedy of his career’
The latest data from auditor EY showed that the number of London initial public offerings fell sharply in the first months of 2023 compared to the previous two years.
Between January and March this year, there were two floats on the main market, raising a total of £63m. However, in the same period of both 2022 and 2021 there were 12 new London main market listings.
‘Clearly at the moment, companies are choosing to list in New York because they have got liquid equity-oriented savings culture, which we’ve now abandoned,’ Buxton told the BBC.
‘If you can resuscitate that then of course companies will come back and be interested in listing in London, if there is the appetite.’
He pointed to some industries he believes will be big growth areas in the UK, including those related to the energy transition, as well as IT, healthcare and life sciences.
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