Adapting to change: How the LSE is responding to global market trends
Tina Whitington 
Date published: Jan 23, 25
The past five years have been challenging for the global markets and particularly the London Stock Exchange (LSE) - beginning with the Brexit uncertainties and following through the COVID-19 pandemic, inflation and the war in Ukraine. As a result, excluding 2021, LSE initial public offerings have been low across this period. High profile moves to US exchanges and the surge of private equity buyouts and alternative funding arrangements have also been contributing factors and major markets have seen declines in listed companies as part of this long-term trend.
The Financial Conduct Authority (FCA) published revised listing rules on 11th July 2024 which apply from 29th July 2024. These set out a simplified listings regime with a single category and streamlined eligibility for those companies looking to list their shares in the UK. These rules remove the distinction between a standard and premium listing on the London Stock Exchange (LSE).
This represents a major overhaul of the listing rules to align the UK’s regime with international market standards. The aim was to ensure investors will have the information they need to make decisions about their money, while supporting the appropriate investor protections to hold the management of the companies they co-own to account.
If these changes were meant to entice new investment into the LSE, they haven’t worked as expected with 2024 seeing 18 companies listing on the LSE, but 88 companies delisting or transferring from the main market. Some of these entities are instead choosing to list on the US market with the belief that, on average, companies on US markets are valued at twice the price per pound of profit as the UK.
However, some feel that this impression is distorted and biased in relation to some of the larger companies such as Apple, Google and Microsoft who are worth more than all of the FTSE100. LSE chief Julia Hoggett is quoted as saying "When you strip them out and look at the actual companies of similar sizes in the US to the sort of company size that we have in the UK. They haven't really been out-performing,".
While company bosses have been quoted as saying that the UK faces an ‘existential crisis’ as big firms have either already left, are considering a move or have been bought by private foreign investors, Hoggett said “there’s no sense of panic” as the UK "is already punching above its weight". The concern is that having companies delisting in the UK has a knock-on effect on other industries, such as insurance, accounting, law and pension funds.
We will have to wait and see what 2025 holds and if the new listing rules entice more companies back to the LSE.
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Read more about the trends in European markets in the Ideagen Audit Analytics report
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