The London stock exchange risks becoming a ‘backwater’ as it fails to keep top companies interested, Sir Martin Sorrell has warned. 

The boss of advertising agency S4 Capital has said that the City has lost its sparkle as big-hitting firms snub the market and others continue to look across the Atlantic for a better valuation. 

‘When you speak to fund managers, London is becoming a backwater,’ Sir Martin (pictured) told the Mail. 

‘London is an increasingly unattractive market because of the liquidity and scale issues.’ 

Listing: Sir Martin Sorrell says that London is an increasingly unattractive market

Listing: Sir Martin Sorrell says that London is an increasingly unattractive market

Listing: Sir Martin Sorrell says that London is an increasingly unattractive market

Companies are instead heading to the US, which is known for its higher price tags and slicker processes. 

British chip designer Arm shunned London for the US this year and Irish building products group CRH and Smurfit Kappa have both moved their primary listings to US soil. 

But Sir Martin, 78, has said he won’t be shifting S4’s London listing any time soon. 

‘We must get our business right and that’s the first thing. There is a reason American companies are valued more highly and that is because they are better companies, with a better record,’ he said. 

‘If we transferred our listing to America, we wouldn’t get the coverage. You’re a smaller fish in a bigger pond.’ 

But the ad tycoon signalled that the UK had become ‘too complacent’ and urged the Government to make London more appealing for firms to list. Sir Martin’s agency S4, which is listed in the capital, has struggled as clients cut back on ad spend. 

The group issued a profit warning in November and shares slumped over 70 per cent in 2023. 

But it’s not just Sorrell that seems to be increasingly disillusioned with share price performance in London. 

Dublin-based gambling giant Flutter is gearing up for a secondary listing in the US this month as its American business continues to boom, whilst Tui and Pearson have suggested they may move to Frankfurt and New York respectively.

This post first appeared on Dailymail.co.uk

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