Jeremy Hunt has met City chiefs as part of a renewed effort to boost London’s ailing stock market – with the creation of a British ISA said to be on the table.
A series of reforms announced by the Chancellor last summer has failed to stem the exodus of listed firms from the UK, with travel giant TUI among the latest to pack its bags.
Hunt and City minister Bim Afolami yesterday held a breakfast meeting with bosses including the chief executives of asset managers Schroders and Abrdn, as well as banking giant HSBC to review the initiatives.
The latest push to bolster the City came as:
- Shares in Jupiter Fund Management fell 14.6per cent after it said it expected to report an outflow of £2.2billion in assets under management for 2023 amid ‘weaker than anticipated retail sentiment’;
- Industry group Calastone said UK equity funds suffered a third year in a row of outflows last year and failed to see a pick-up last month even as confidence returned to the wider market;
- Figures from advisory firm Alvarez & Marsal showed the UK was the biggest target in Europe for activist investors last year as cheap valuations made them easier to be snapped up.
Investment drive: Chancellor Jeremy Hunt and City minister Bim Afolami held a meeting with bosses including the chief execs of Schroders and Abrdn, as well as banking giant HSBC
Hunt’s meeting with City chiefs including HSBC’s Noel Quinn, Schroders’ Peter Harrison and Abrdn’s Stephen Bird was intended to review initiatives he announced in his Mansion House speech last month.
They include plans to unlock billions from pension funds to invest in UK growth companies.
And City regulators plan to simplify stock market listing rules to make it more attractive for firms to float in the UK.
Among other ideas being considered ahead of Hunt’s Budget in March are a UK individual savings account (ISA), designed to funnel more of the nation’s nest eggs into Britain’s stock market.
A Treasury spokesman said the Chancellor and Afolami ‘met with industry leaders to discuss the Government’s plans and progress to make the UK the global capital for capital’.
The need for reform was crystallised by the decision by Cambridge-based chip design group Arm to float in New York rather than London last year.
Yet so far the effort appears to have had little impact.
Tui – Europe’s biggest tour operator – last week recommended to shareholders that it should abandon its dual-listed status in London and Frankfurt in favour of a sole listing in Germany.
And a recent survey found that one third of UK public company bosses have considered listing outside the UK.
The FTSE 100’s underwhelming performance last year underscored why companies are seeking richer valuations elsewhere.
While the London blue-chip index rose by 3.8 per cent in 2023, the performance trailed behind the likes of New York’s S&P 500 and Germany’s Dax, which both climbed by more than 20 per cent.
Yesterday’s update from Jupiter said that it was on course for net outflows of £2.2billion of funds under management for 2023.
It had previously predicted only a ‘modest’ reduction but blamed ‘a delay in the funding of some institutional mandates combined with weaker than anticipated retail sentiment in October and November 2023’ for leading to a worse than anticipated outcome.
In a further blow to Jupiter boss Matthew Beesley – who has been battling to turn around its performance since taking over in October 2022 – it disclosed that long-serving portfolio manager Ben Whitmore, who joined in 2006, would leave in July to set up his own boutique firm.
He manages around £10billion of Jupiter’s assets, about one fifth of its total.
Brokers at Peel Hunt said: ‘This is likely to cause significant uncertainty as to the level of funds retained. Inevitably, we expect a chunk will be lost.’
