Square Mile bids for glory: The LSE must catch up with the rest of the City, says ALEX BRUMMER

Share markets in London have been through a brutal period. The number and value of bids for UK

companies have been running at exceptionally high levels, and equity markets have looked in grave danger of depopulation.

There have been up to 160 bids above £100million since 2023, worth an estimated £165billion. And initial public offerings (IPOs), floats as we used to call them, have ground to a halt.

The contrast between the performance of the London stock market and the rest of the Square Mile could not be greater.

Jobs in the financial sector since Britain left the European Union have increased by some 676,000, while Britain’s financial and legal services exports have powered ahead.

Services exports to the EU are up 57 per cent in ten years and £62billion higher than a decade ago (28 per cent if inflation is considered). 

Services exports to non-EU countries are up 49 per cent, or £107billion (26 per cent after inflation), according to the House of Commons Library.

Britain as a centre for finance has never been busier, with derivatives markets, legal services, M&A advice and private equity activities roaring away. 

The laggard has been stock trading. Retail investment has been constrained by stamp duty on share transactions, although professional investors have ways of skirting this penalty.

London has also been perceived as a defensive market, full of stocks in traditional areas such as banking, mining and engineering, but lacking the excitement of the Nasdaq.

Even more exasperating, IPOs that should have come to London, such as Universal Music and the Magnum Ice Cream Company, chose Amsterdam for their main listing. 

It will come as a relief that fintech group Airtel Money is choosing London for an IPO, which could value the Africa-based mobile payments network at close to £7billion.

Emerging markets have proved fertile ground for mobile and digital payments systems, making up for the lack of reliable bricks and mortar services. 

The UK, with its long history in Africa and markets across the globe, ought to be in a good position to vacuum up this activity.

One pioneer, Worldpay, an outgrowth of the Royal Bank of Scotland, was snapped up by an American predator in 2017 and has been on a remarkable journey.

Another, the foreign exchange innovator Wise, was originally quoted in London but switched its listing to Nasdaq in May of this year.

The jewel in the crown of British fintech, Revolut, which is seeking banking licences across the world, has been vacillating between London and New York – or both – with a potential value of more than a £100billion.

Regulators in London have not been idle. The Financial Conduct Authority has loosened listing rules to make the City more attractive to tech and AI companies.

The new freedoms have been embraced by the London Stock Exchange (LSE) which launched PISCES, an intermediate market that seeks to bridge the gap between private companies seeking equity finance and publicly quoted markets. 

It is fashionable to disparage London as an outlier when it comes to technology.

Yet London listed firms can claim considerable successes. Cambridge-based Arm Holdings, which was relisted in New York by SoftBank, is valued at $347.8billion (£260billion) – more than ten times the price when it was taken off the London stock exchange in 2016. If it were still in the UK, it would be the FTSE 100’s most valuable enterprise.

None of this means the LSE is an unsafe place for fintech or AI. The computer outfit Raspberry Pi is a resounding success with the shares jumping 110 per cent this year. Computacenter is another AI winner, up 87 per cent in 2026.

Relx and the London Stock Exchange Group have been transformed by AI but roiled by the speed of invention. They remain British winners.

The assumption that New York offers riches for companies which shift their listing across the Atlantic needs to be challenged. 

Yes, New York offers riches for executives seeking fat share incentive packages. However, the UK’s entrepot location, the presence of global banking in Britain and a trusted legal system mean there is no reason why the LSE should not be the comeback kid.