Given that AIM began some 30 years ago, and the previous Labour government in 1997, one can imagine that the start of the rot for the London stock market was from soon after that time. After all, socialist like to level everyone down, and destroy sources of national wealth in the economy, of which the City of London has been and remains a clay pigeon. Alas, from 2010 the erosion of the City continued with the Conservatives, helped along by the EU’s City destroying directives, such as MiFID’s I and II, which were designed amongst other things to erode London’s competitive advantage in Europe. Wind forward 11 years from the first MiFID, and after Brexit it is left to the UK government to continue to allow the destruction of the London stock market. Companies are de-listing in droves, and the people responsible for this happening are still getting fat salaries and saying how fine and dandy everything is. Even worse, the anti-enterprise, anti-entrepreneurial vibe continues, with most of the powers that be hating those who work in the City and are trying to create wealth. Indeed, it appears that we have veered from mild socialism to full on Marxism, a point underlined by this government’s taxing for growth, and taxing enough to cause 10,000 millionaires to leave the country. Presumably Labour thinking is something along the lines of the more rich people leave the country the more successful the rest of us could be. Interesting thinking.
New Proposals
Of course, what is needed is radical action to save the London market, but apart from highly technical sounding proposals, that would not change the cost and the red tape associated with getting listed or being listed, the whole feel just sounds like huff and puff. For instance, the article below from a month ago:
For instance, there is the simple stuff. Why are investors paying for live prices, and why are they still paying stamp duty? Why is there not a fixed cost to get listed and be listed? All the hot air about making pension funds buy UK stocks still continues. This is along with all the other Kafka grade gumpf in the mix. I liked the summary by Bird & Bird, last week highlighting the aftermath of the London Stock Exchange’s Future Of AIM discussion paper.
Unfortunately, recent years have underlined the way having the LSE in charge of AIM, is like having Dracula in charge of a blood bank. And it is clear that whatever will be done will now be too little, too late. This is a point underlined by the proposal last year to create a new private stock market called PISCES. PISCES is effectively an admission that the LSE as it currently stands, is doomed.
Communism To The Rescue
As is evident from the first part of this article, the prognosis for the London stock market is not great. This is even if by some miracle the US tariffs debacle ends well. It has been clear for years that unless you are a company of blooming blue chip dimensions, London is not the place to be. Even if you are flourishing here, it would probably mean you have a market cap much higher in the US or elsewhere. But there is hope. Massive hope, and from an unlikely source. It is ironic that part of the demise of the LSE has been being infiltrated by those who would prefer it to die, for example socialists and Marxists, who are always happy to find a cushy job in the public sector. But given the latest article in The Telegraph today, rather than waiting for red tape to be cleared, “China ploughs £90bn into FTSE 100 companies.” While the world’s largest tyranny is perhaps not the most expected source of salvation for the London market, this investment is more than welcome. Indeed, given the lay of the land in the UK since last July, there may be an increasing number of people in the UK who prefer the way they do things over there.
Of course, this being the UK the article warns that there are concerns that the Chinese have perhaps too much influence on leading UK companies. Given that one can be sure they have already hacked into all our computers and tech systems, there is probably little to hide now. Instead, one can only instruct the “People’s” Bank Of China to buy up as much of the FTSE 100 as possible, ideally getting it up to 10,000. At the same time our ailing infrastructure needs as much cash as possible. Already in Heathrow Airport, let our Chinese friends do the investment we do not have the money to do, or the will.
