Stock market is ‘drying up’ money, Peel Hunt boss warns

Broker boss Peel Hunt has warned that money is “leaking” from the London stock market and added that sentiment in the City has been hit by the Budget.

Chief executive Steven Fine hailed a pickup in trading but sounded the alarm over a lack of new listings in London.

It also noted that confidence had been hit, particularly in the junior AIM market, as a result of the tax raid announced by Chancellor Rachel Reeves last month.

Meanwhile, Peel Hunt posted half-year profits boosted by a surge in dealmaking sparked by multiple mergers and acquisitions (M&A).

The group posted a pre-tax profit of £1.2m for the six months to September, against a loss of £800,000 the previous year, while its revenue grew 26 per cent to £53.8m.

But despite the rise in profits, Fine warned that most of the activity driving the business was coming from mergers and acquisitions rather than new listings in London.

He noted that money had been leaving UK equity funds every month for the past three and a half years, a situation he described as “alarming”.

‘We are busy, but our pipeline is overwhelmingly focused on mergers and acquisitions.

‘That means there will be more public companies going private or merging. And that means you’ll end up losing more (listed) companies because they’re too cheap,” Fine told the Mail.

He also said that while the market had shown signs of “improvement”, this had “slowed down over the summer” and investor confidence had taken a hit in the final weeks of September “due to concerns around the budget of the UK, particularly in relation to AIM’.

His comments follow a series of takeovers and delistings over the past week that have renewed fears that the London Stock Exchange is losing its shine and leaving listed companies open to bids or considering moves elsewhere. markets.

Takeaway delivery platform Just Eat became the latest company to abandon ship on Wednesday, saying it would exit London but maintain its listing in Amsterdam.

Meanwhile, insurance giant Aviva has made a bold attack on rival Direct Line and Australian banking giant Macquarie has launched a £700m takeover bid for rubbish collector Renewi.

Fine estimated that around 100 companies had been acquired or delisted in London this year, which even a boom in new listings would struggle to balance.

“If we have a (IPO) bonanza next year and get 20 or 30 listings, it’s still a shocking ratio,” he said.

Peel Hunt shares were unchanged at 108.5p at yesterday’s close.