Europe News Desk!!! London enjoys a good reputation in the global financial markets. Over the years, the London Stock Exchange attracted a large proportion of investor capital relative to the size of the UK economy, reflecting the international nature of its listed companies. In 2000, UK-listed equities made up 11 percent of the MSCI World Index, which tracks more than 1,500 companies, according to Citigroup. Fast forward 23 years and the UK market now represents just 4 per cent, CNN quoted the bank’s chief global equity strategist as saying at the Financial Times. Investors have been attracted to fast-growing markets in other parts of the world, such as China and India, and to big tech IPOs on Wall Street.
Meanwhile, UK pension funds have reduced their exposure to local shares in search of more fixed returns on government bonds. This was followed by Brexit and years of political turmoil, which undermined London’s position as the king of European finance, further weakening Britain’s position in the eyes of investors. CNN reported that the combined effect has had a huge impact on the FTSE 100, which despite a recent hot streak has pared gains since the global financial crisis at benchmark exchanges in the EU and US.
Fears for London’s future flared up again last week, when chip maker ARM, the crown jewel of Britain’s tech sector, said it would hold its IPO on Wall Street, and CRH, the world’s biggest building materials supplier, Said it would move its primary listing to the US. Shell, London’s largest listed company, is also reportedly considering relocating. The health of London’s markets is vital to the UK economy, so fears are growing. Taken together, the company’s moves feel like a vote of no confidence in the UK investment climate, said Michael Hewson, chief market analyst at stockbroker CMC Markets UK. London is still a major international financial centre. More than $3.8 trillion in daily forex trading is transacted in New York, Singapore, Hong Kong and Tokyo combined, reports CNN. According to the London Stock Exchange, 70 percent of the global secondary bond market is traded in the city. Outside the US and China, London also saw the most money raised through IPOs and follow-on deals in 2021. Britain remained the world’s leading exporter of financial services that year.
–IANS
World News Desk!!!
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