The slow death of the UK stock market

I’m old enough to remember when 2021 was a record year for IPOs with 126 companies listing and a total of £16.8bn raised.

Since then, it’s been very much downhill.

During that record year, we saw the likes of Darktrace, Deliveroo, Wise, Alphawave, Dr. Martens, Trustpilot, Oxford Nanopore, and Moonpig all launch to much fanfare.

As a reminder the prices of these IPOs were as follows: - Alphawave price was 410p, Deliveroo 390p, Darktrace 250p, Wise 800p, Oxford Nanopore 425p, Trustpilot 265p, Moonpig 350p and Dr. Martens 370p.

How many of them are trading above their IPO price, and more to the point how many are still here?

The answer to that question is about half.

In 2025, Alphawave, a Canadian chip and semiconductor maker, was acquired by Qualcomm for the sum of $2.4bn.

Its customers included the likes of Samsung, TSMC as well as Intel, yet it was snapped up by Qualcomm for what was essentially pocket change of $2.4bn, or 183p, less than half the price of its 2021 IPO.

With the AI trade all the rage, can you imagine what that business would be worth now, yet the UK couldn't hold on to it.

Since then, we've also seen the departure of Darktrace, Deliveroo, Spectris, while Wise moved its primary listing to the US.

The remaining companies while still here have struggled to match their IPO valuations, while we're also seeing the departure of more established names from the UK market.

In the last two years alone we've seen the departure of Just Eat Takeaway, CRH, Hargreaves Lansdown, TUI, Flutter Entertainment, with Ashtead also moving its primary listing and renaming itself Sunbelt Rentals.

Add in this year's numbers of 19 FTSE 350 business receiving bids including, on the FTSE 100, DCC, Schroders, Intertek, Beazley and Segro and on the FTSE 250 you have Mitie, Rotork, Tate and Lyle and easyJet, and you have a crisis of epic proportions.

What message is this sending, that the UK market is undervalued?

Absolutely yes, but it’s also telling us something about the UK as an investment destination, and it's not a positive one, because these companies aren't being replaced and it's not hard to see why.

It would be very easy to blame the current government for the malaise surrounding the UK market, and they certainly aren’t helping with some of their policies around non-doms, capital gains tax, and the AIM market, however the previous government was little better.

There has been talk of some changes, however none of any of the proposals under discussion are likely to move the dial, and some of them are just plain daft, namely the requirement to encourage UK pension funds to invest in UK infrastructure projects.

If a project is investable then money should flow into it naturally, unless there are barriers to it doing so.

The reality is that the UK has become less investable due to higher taxes, whether they be windfall taxes or levies, the removal of reliefs on dividends, stamp duty, less retail flow, and higher regulatory barriers for pension funds.

Yet despite these problems there remains huge political denial about the scale of the problem with certain Labour MPs celebrating the fact that with UK markets at record highs and citing it as an endorsement of government economic and fiscal policy.

It’s an utterly cretinous interpretation, and shows a complete misunderstanding of the relationship between the stock market, and the economy.   

We have started to see some semblance of a pushback when it comes to the City of London making itself heard with Peel Hunt at the forefront of things, which is welcome.

We also heard some positive noises last year from Conservative Party leader Kemi Badenoch urging UK business leaders to “get on the pitch too" to make the case for the UK.

This is all very welcome; however, it jars somewhat when you consider that Badenoch was business secretary in the previous Conservative administration, and which in turn helped to contribute to the current situation which we find ourselves in.

This was the same administration you might remember where it was reported that former PM Boris Johnson had said “f**k business”.

Well, a lot of businesses certainly are now!

In any case, I’m not sure the problem is as simple as getting on the pitch as she says.

Business has never been shy about doing that. It’s the politicians that are the problem here, as evidenced by some of the tweets celebrating record highs on the FTSE 100 illustrate.

Ultimately, Kemi Badenoch has a lot of work to do in repairing the Conservatives reputation on that score.

Until that perception changes the London Stock markets slide into irrelevance is likely to continue, whoever is in power.