Reinvigorating UK equity markets
Charles Hall - Peel Hunt
City professionals are very clear that a comprehensive programme is required to encourage a turnaround in the London market’s fortunes and encourage long-term equity investment. The proposed regulatory reforms are expected to level the playing field for UK listed companies, but the demand side needs to be addressed to ensure the reforms have the necessary impact.
12th October 2023
Key findings
96% say we need to reinvigorate UK equity culture
58% support the creation of a new growth focused market
92% calling for incentives to increase investment in mid & small cap companies
68% call for the creation of a practitioner led regulator
Clear call for companies to prioritise investment over shareholder returns
Majority of investors support re-bundling to improve the level and quality of research
The survey captures the views of 555 City professionals, with the majority representing investors and corporates thus providing a broad view of those directly involved in equity markets. This comes on the back of a material reduction in the number of quoted companies (-20% over 5 years) as well as considerable de-equitisation as companies are acquired and UK indices underperform. This has resulted in a negative loop whereby investor interest has reduced, resulting in lower valuations, reduced liquidity and heightened M&A activity on undervalued UK companies. It has also created a challenging backdrop for any company considering an IPO.
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