Alex Brummer: London Stock Exchange Must Catch Up With the City to Restore Its Global Edge

London’s share markets have endured a brutal stretch. Bids for UK companies have surged in both number and value, while the equity markets have appeared perilously close to being drained of new life.

As many as 160 offers worth more than £100million have been made for UK companies since 2023, with a combined estimated value of £165billion. At the same time, initial public offerings (IPOs), once routinely described as floats, have almost disappeared.

The gulf between the London stock market’s performance and the wider Square Mile could hardly be more striking.

Since Britain left the European Union, employment across the financial sector has risen by about 676,000, while the country’s financial and legal services exports have advanced strongly.

Financial and legal services exports to the EU have climbed 57 per cent over the past decade, an increase of £62billion. Adjusted for inflation, the rise is 28 per cent.

The contrast between the London stock market’s struggles and the broader strength of the City could hardly be sharper.

Exports of services to countries outside the EU have risen 49 per cent, or £107billion, according to the House of Commons Library. After inflation, the increase stands at 26 per cent.

Britain’s role as a global financial centre has never been busier. Derivatives trading, legal services, mergers and acquisitions advice and private equity are all thriving.

Stock trading, however, has lagged behind. Stamp duty on share transactions has weighed on retail investment, even though professional investors have methods for avoiding the charge.

London is also widely viewed as a defensive market, dominated by established sectors such as banking, mining and engineering rather than the high-growth companies associated with the Nasdaq.

Adding to the frustration, companies that might traditionally have listed in London—including Universal Music and Magnum Ice Cream Company—selected Amsterdam for their main listings.

Against that backdrop, the decision by fintech group Airtel Money to pursue a London IPO will be welcomed. The Africa-based mobile payments network could be valued at close to £7billion.

Emerging markets have become fertile territory for mobile and digital payment systems, which are helping to compensate for the shortage of dependable bricks-and-mortar financial services.

With its long-standing links to Africa and connections to markets around the world, the UK should be well placed to capture more of this growth.

Worldpay, one of the sector’s early pioneers and an offshoot of Royal Bank of Scotland, was bought by an American predator in 2017 and has since undergone a remarkable transformation.

Wise, another fintech success story and a pioneer in foreign exchange, was initially listed in London before moving its quotation to Nasdaq in May this year.

Revolut, regarded as the crown jewel of British fintech and pursuing banking licences around the world, has continued to weigh London against New York—or potentially both—with a possible valuation exceeding £100billion.

London’s regulators have taken steps to respond. The Financial Conduct Authority has relaxed listing requirements in an effort to make the City more appealing to technology and artificial intelligence companies.

The London Stock Exchange has embraced those changes by launching PISCES, an intermediate market designed to connect private companies seeking equity funding with publicly traded markets.

It is fashionable to disparage London as an outlier when it comes to technology.

Yet London listed firms can claim considerable successes. Cambridge-based Arm Holdings, which was relisted in New York by SoftBank, is valued at $347.8billion (£260billion) – more than ten times the price when it was taken off the London stock exchange in 2016. If it were still in the UK, it would be the FTSE 100’s most valuable enterprise.

None of this means the LSE is an unsafe place for fintech or AI. The computer outfit Raspberry Pi is a resounding success with the shares jumping 110 per cent this year. Computacenter is another AI winner, up 87 per cent in 2026.

Relx and the London Stock Exchange Group have been transformed by AI but roiled by the speed of invention. They remain British winners.

The assumption that New York offers riches for companies which shift their listing across the Atlantic needs to be challenged. 

Yes, New York offers riches for executives seeking fat share incentive packages. However, the UK’s entrepot location, the presence of global banking in Britain and a trusted legal system mean there is no reason why the LSE should not be the comeback kid.