Tuesday, June 18, 2024, 6:00 a.m
The boss of Peel Hunt said the City “should be very concerned” about its future as he defended a series of warnings issued by the investment bank about the state of Britain’s capital markets.
The London-listed bank, which revealed last week that its losses had more than doubled last year, has been among the loudest voices sounding the alarm on London after a slump in capital markets activity and a lack of new listings.
In a series of notes to investors, Peel Hunt warned of an “inexorable” exodus from London markets, saying the smaller end of the stock market was at risk of being gutted without swift action from regulators and the government.
But the tone of the letters has unsettled some members of the Square Mile, who warn the bank’s comments could fuel the negative narrative that has engulfed the capital in recent months.
Speak with City AMPeel Hunt boss Steven Fine defended the warning, saying the smaller end of the London Stock Exchange was at risk of being “emptied”.
“For me the question is really simple, do you believe there is a future for public markets in the UK? Because if you do that, you should be very concerned about just the scale and the size of the companies that are leaving and the lack of replenishment,” Fine said. City AM
“If you don’t care, if you’re in the camp where they say I really hate it—excuse my language—then that’s fine. But if you’re interested, you should look at the 100 companies that left.”
Well, he added that “there will always be the FTSE 350” but “emptying the ecosystem” that supports smaller companies is “harmful”.
“If you don’t care, if you’re in the camp where they say I really hate it—pardon my language—then that’s fine. But if you’re interested, you should look at the 100 companies that left.”
Peel Hunt boss Steven Fine
The comments point to an exodus of companies from the smaller part of the London Stock Exchange, particularly its junior AIM market, where mid-sized firms such as Peel Hunt make the lion’s share of their money.
In its full-year results last week, the bank said it fell to a loss of £3.3m in the year to March, down from a loss of £1.5m in 2023, with “continued cost pressures” offsetting a rise of 4.3 percent. in sales to £85.8m.
Middle-market banks and brokers in London have been starved after just 23 firms floated on the London Stock Exchange last year, about 60 percent less than in an already quiet 2022.
However, Fine said there are now promising signs of recovery on the horizon.
“The UK market feels like it needs to turn around and reassert itself,” he added.
The market was buoyed by the prospect of a bumper sale from fast fashion giant Shein and the successful debut of computer maker RaspberryPi in recent weeks, a deal brokered by Peel Hunt.
“If you had to pick a poster child for a company you wanted to re-IPO, you couldn’t have chosen better than a company like Raspberry Pi,” said Fine, pointing to the fact that it’s a UK-based technology. company.