My colleague Nicholas Cecil’s fascinating interview with Jeremy Hunt drew some thought provoking observations about the state of health of the London stock market, which can be summed up by four words.
Nothing. To. See. Here.
According to the Chancellor, only a handful of companies have deserted London in favour of New York, and in any case, when they do, their shares price performance has been far from stellar.
Meanwhile, proposed changes to listing rules will make London as attractive as Nasdaq in due course. Hunt also confidently predicts that London will one day have its own groups of FAANG mega-tech stocks because of the sheer number of Unicorns being created in the UK.
I only wish I could buy into this Panglossian vision of the City’s future with as much enthusiasm as the Chancellor.
He should perhaps be given some leeway. He has an election to fight, both for the keys to 11 Downing Street and in his knife-edge Surrey constituency of Godalming and Ash.
He also knows that the chances are that it will be “someone else’s problem” after July 4.
But that does not mean his words can be spared scrutiny.
In one respect, Hunt is absolutely right. The UK does have a remarkably successful tech sector that it can be proud of. Some of those start-ups will become unicorns, and who knows, perhaps go on to be global tech giants.
But that is a long way from saying that many, or indeed any, of them, will have London as the primary listing for their shares.
With tech stocks trading at multiples typically two to three times higher in New York than on this side of the pond, why would the board of any tech company considering going public choose London?
Tinkering with listing rules will not change that. What is needed is more basic cultural change that reinvigorates the post-Brexit economy.
But Hunt cannot say that.
