UK stock market shrinking at fastest pace in history, says Goldman Sachs


Charles Hall, an analyst at Peel Hunt, said some of the rise could be attributed to short term investors who buy shares in companies subject to a bid.

“Short term money can boost your market but when they leave that money leaves with them. What we need is fund flows into the UK equity funds.”

The fresh dealmaking means around £100bn of market value is set to leave the exchange through takeovers and delistings this year, according to Peel Hunt.

If the pace continues, the domestically focused FTSE 250 could be extinct by 2030, it said.

Mr Hall added: “The trend line for the London market is bad because companies leaving will make us smaller.

“We’re living in a global world and it’s either be the hunter or be hunted, and we are definitely being hunted.”

More than 20 UK listed companies are currently facing takeover bids, including the proposed takeovers of Royal Mail, DS Smith and Virgin Money.

At the same time, there have been fewer stock market debuts on the London stock market, squeezing the overall number of companies listed on the market.

London is yet to register a major new flotation this year.

It came as the former Formula One owner CVC secured €400m (£343m) more than expected from its Amsterdam float after rejecting London.

Shares in the private equity giant, which owns a stake in the Six Nations rugby competition and masterminded the buyout of F1, were set at €14 – the midpoint of an indicative €13 to €15 range – and they rose 25pc to €17.55 on their debut on Friday.

Separately on Friday, energy giant TotalEnergies, one of France’s largest companies, dealt a blow to France by suggesting it could move its primary listing to New York. European indices have been struggling to compete with the US, where listings tend to attract much higher valuations, while chief executive pay is far more generous. 

Shell has also suggested it is considering quitting the FTSE 100 for New York amid concerns it is under-appreciated by investors.



This article was originally published by a www.telegraph.co.uk

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