The London stock market is displaying signs of recovery following one of its toughest years to date, with substantial changes anticipated for 2025 as major listings take shape and investor confidence gradually improves.
Throughout 2024, the London Stock Exchange (LSE) encountered numerous setbacks, including limited initial public offerings (IPOs) and the exodus of established companies. The exodus was highlighted by the departure of notable firms such as Just Eat, Flutter Entertainment, and Tui, contributing to the largest number of delistings from the LSE since the global financial crisis.
According to data from auditing giant EY, 88 companies left or transitioned their primary listings from the LSE last year, significantly surpassing the 18 new listings recorded. This stark statistic showcased the declining attractiveness of the London market, exacerbated by lackluster liquidity and valuations, especially when compared to rival global financial centers. Flutter, for example, shifted to the New York Stock Exchange to tap the “world’s deepest and most liquid capital markets,” citing the strategic advantages of operating outside London.
Just Eat Takeaway opted to abandon its London listing entirely, citing the “administrative burden, complexity and costs” involved. This sentiment was echoed by other corporations, which faced mounting pressure from investors advocating for transitions to markets offering more capital. The fluctuations within the market were reflective of bigger, underlying issues, such as geopolitical instability, sluggish economic growth, and waning enthusiasm for local equities among pension funds.
Analysts observed how the regulatory climate also switched gears amid the turbulence, allowing space for potential recovery. The UK’s Financial Conduct Authority (FCA) implemented new listing rules aimed at enticing growth-centric businesses and stimulating market activity. These changes could assist London as it strives to regain its footing as a key global financial hub.
Despite the challenges of the past year, signs of market sentiment recovery have begun to surface. UK equity funds recently recorded their first net inflows after over three years, highlighting improved investor interest. A notable listing decision by French media giant Vivendi to launch Canal+ on the LSE signals growing international confidence, potentially laying the groundwork for greater activity as 2025 approaches.
Experts remain hopeful about the future of the London market, pointing to various significant IPOs on the horizon. Among them are the Greek firm Metlen, which is eyeing a valuation of £5 billion, and Chinese online retail giant Shein, anticipated to hold substantial market value. These potential listings are set against the backdrop of only £700 million being raised from just eight IPOs during 2024, markedly down from £800 million raised through 11 IPOs the previous year.
Scott McCubbin, EY’s IPO lead for the UK and Ireland, characterized last year’s market performance as “quiet,” especially with the notable outflow of companies. Nonetheless, he expressed cautious optimism going forward: “A stabilised domestic policy environment post-election, [and] a solid pipeline of deals and listings reform could drive recovery.” McCubbin underscored the importance of effectively timing IPOs as businesses seek to navigate through this transitional phase.
With pressures continuously mounting from rival markets, such as Amsterdam—where CVC Capital Partners chose to list its €2 billion IPO—London must maintain its competitive edge. The automation and digitization of trading activities may pave the way for increased volumes and opportunities for market participants aiming to capitalize on the potential rebound.
The expectations for 2025 lean toward significant improvements, driven by enhanced political stability and newfound regulatory clarity. The LSE's ability to attract businesses and investors will fundamentally depend on its success at translating current optimism and new regulations to tangible market activity.
Trading trends manifest early signs of increased interest from investors considering all potential options within the stock market. Previous limitations may hinder some from acting too soon, yet the year has begun with promise as the potential for revitalization encourages parties to explore opportunities.
Investors are advised to research potential shares listed on London’s exchange and assess trading or investment strategies. Following the opening of accounts and monitoring positions allows traders to manage risks effectively.
The outlook for the London Stock Exchange remains mixed; the year 2024 presented significant challenges, yet the groundwork laid during this challenging period could prove advantageous as the market transforms moving forward. The collective goal will be for London to assert itself amid fierce global competition, and as the promise of new listings looms, stakeholders await the market's shift to recovery.