London Stock Exchange's mass exodus

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The government is being urged to stop companies leaving the London Stock Exchange and to incentivise new investors.

The UK’s stock market is shrinking at the “fastest pace in more than a decade”, said Bloomberg, partly due to more company takeovers by foreign firms, but also because other countries are offering better valuations. Around 45 companies have delisted “due to mergers and acquisitions” so far this year, which is the highest number since 2010.

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Key firms are “quitting for the US”, while some have moved to EU countries as a result of Brexit, said the BBC. The New York Stock Exchange also does not tax share sales and purchases, unlike London, where the government charges a 0.5% stamp duty. That alone makes it “not rational” to float on the LSE instead of the US, Nikolay Storonsky, the head of UK banking start-up Revolut, told The Telegraph.

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However, calls for more direct action from the government have yet to be answered. The purpose of stamp duty on shares is not “logically correct” and needs to be looked at, the Lord Mayor of London, Alastair King, told The Telegraph, while Julia Hoggett, the head of the London Stock Exchange, said the UK shouldn’t be “taxing our own investors to invest in our own economy”, This is Money reported.

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