Mark Kleinman's Report: City's Initial Public Offering Pushed by Reeves Faces Persistent Sluggishness in Gaining Pace
In the bustling heart of the financial district, London's dwindling appeal as a haven for Initial Public Offerings (IPOs) remains a persistent concern. The latest figures from EY reveal a dismal picture, with only five companies listing on the London Stock Exchange (LSE) during the first quarter of the year, collectively generating just £74.7 million - a stark 74% drop compared to the same period in 2024.
The hope that Shein, a Chinese-founded online fashion retailer, might act as a catalyst for London's listing struggles appears to be fading, as investors deliberate the enduring impact of Donald Trump's tariffs regime before committing to the flotation.
Last week, Emma Reynolds, the minister for investment, fostered discussions with executives from tech companies such as Monzo, Oaknorth, Quantexa, and Revolut, aiming to address London's listing conundrum. While the government's level of engagement with industry is commendable, the prospect of meaningful action remains unclear.
Executives present at the meeting called for a series of reforms to encourage companies to list on the LSE, including tax breaks on UK share purchases, reduced capital gains tax for employees, and the removal of restrictions on non-executive directors holding or being paid in shares, aiming to boost their incentive to grow their businesses. Without a significant influx of fresh incentives, the attendees warned that London may miss out on generating any real momentum for its markets.
As it stands, only Monzo seems likely to float in London, while Oaknorth and Revolut seem more inclined towards New York listings.
Meanwhile, the looming sale of the Daily Telegraph has taken an unexpected turn, with the Department for Culture, Media and Sport easing restrictions on foreign state investors owning up to 15% of British national newspapers. This move seems tailor-made for the Abu Dhabi-based vehicle eager to hold a stake in the Telegraph titles. While the prospect has faced criticism, notably from Fraser Nelson, the former Spectator editor, it may pave the way for a long-awaited deal.
Under the proposed plans, IMI would own 15% of the Telegraph titles, RedBird Capital would hold 75% (with potential syndication to other investors), and Lord Rothermere's Daily Mail publisher, DMGT, would retain just under 10%. However, there remains some uncertainty regarding the final part of this arrangement, as discussions suggest DMGT may not be part of the deal in the end.
Regardless, all parties involved hope for an announcement soon, though additional regulatory review processes could further prolong the conclusion. With the end of this drawn-out saga in sight, Telegraph journalists can finally catch their breath.
Lastly, the Federation of Small Businesses (FSB) has launched a campaign to improve the way HMRC operates, highlighting concerns about bureaucracy, a rising tax burden, and a volatile economy eroding small business confidence. The FSB is urging the government to impose a growth duty on HMRC, in line with its new approach to economic regulators, and to overhaul the Valuation Office Agency, which plays a key role in imposing business rates and is due to merge with HMRC.
While the FSB's demands are justified, its calls for improvements in the current service from the Valuation Office Agency within the new structure may go unheeded. As the UK government grapples with the challenge of reviving London as a leading destination for IPOs and fostering a supportive environment for small businesses, the FSB's concerns remain valid.
- The concerns about London's appeal for Initial Public Offerings (IPOs) in the financial district persist, as the lack of fresh incentives might prevent it from generating any real momentum for its markets.
- In the world of technology and business, executives from tech companies like Monzo, Oaknorth, Quantexa, and Revolut are advocating for reforms to encourage companies to list on the London Stock Exchange (LSE), hoping to boost government engagement and address the listing conundrum.
- Meanwhile, in the general-news sector, the potential sale of the Daily Telegraph has taken an unexpected turn with easing restrictions on foreign state investors, raising questions about foreign influence and the impact on the UK's economy and politics.
