Finshots Daily Is the London Stock Exchange losing its relevance?
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Jan 13, 2025 The London Stock Exchange is facing a crisis of relevance, struggling with strict listing rules that deter tech firms. Recent reforms aim to simplify these regulations, but broader economic shifts are also needed. The decline is marked by a drop in IPO funding, plummeting from third to eighteenth place. Rising borrowing costs and a cooling investor interest are making companies hesitant to list their shares. The future of this iconic exchange hangs in the balance as it grapples with these pressing challenges.
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LSE's Decline
- The London Stock Exchange (LSE) has dropped from 3rd to 18th place in IPO fundraising.
- Unexpectedly, markets like Malaysia, Luxembourg, and even Oman have surpassed the LSE.
UK Economic Woes
- The UK's economic struggles, including high borrowing costs and increasing taxes, deter investors.
- This leads to lower economic growth, pushing investors towards markets with better prospects, like the US.
Inflation-Linked Bonds
- The UK's inflation-linked bonds, introduced in 1981, have become a burden due to soaring inflation.
- This makes the UK appear less stable to investors, who favor the US despite its own debt issues.