FTSE's 'SOS to invest' as firms eye up new markets

THE UK stock market is facing an existential crisis.

- By Harvey Jones

Once a global leader, it’s now a shadow of its former self. The FTSE 100 has put on a decent show in the first half of this year, rising around 5.5%, but appearances can be deceiving. Over the past 15 years, London’s slice of the global market has plunged to just 3% of the total, down from 5% five years ago.

The FTSE 100 does have strengths. With around 70% of revenues earned overseas, it offers diversification and solid dividends globally. But low valuations mean more lucrative listings elsewhere are being opted for. And a laissez-faire takeover culture adds to the sense London is for sale.

For many firms, the grass looks greener elsewhere. And an increasing number are taking flight. Even Stocks and Shares ISA investors don’t want to know, with most pouring money into the booming US market.

DELISTING

Last year, 88 companies left the UK stock market and just 18 joined. Low FTSE 100 valuations have driven UK firms abroad, with chip designer ARM Holdings, Ashtead Group, Flutter Entertainment, Smurfit Kappa and others heading to the US. Travel firm TUI now lists only in Germany.

Talk of a mega-merger between energy giants BP and Shell has fuelled anxiety. Even when British firms stay, they're being swallowed up by private equity. Latest to succumb is industrial group Spectris, snapped up by US firm Advent International for £3.8bn.