Revealing the Hidden Flow
Trading in London has grown more than previously thought. City AM reports that the Financial Conduct Authority has found a major increase in trading value. Some estimates suggest activity is up to three times higher. This is when hidden transactions are considered.
A large part of this hidden volume is from dark trading. Instead of using official exchanges, traders conduct deals through private channels like banks and financial institutions. These trades still use prices set by the London Stock Exchange, but they aren't always counted in public records.
The LSE has noted that a growing share of trading occurs outside listed platforms. This aligns with the FCA's findings that cash in the system was being underestimated. By factoring in all trading, officials argue the City has more liquidity than people realize, which could help reduce worries about market performance.
Recent reports also highlight a trend of companies leaving London. Wise, Arm, and CRH have all moved part of their operations to the U.S. They are chasing more favorable investment conditions. The FCA wants to boost openness in share trading by 2028. The London Stock Exchange Group has raised concerns that some data-sharing plans might unfairly benefit certain investors.
Takeover Boost and Political Pressure
Despite ongoing doubts about the City's trading health, recent data shows a positive shift in takeovers. According to the Financial Times, more public bids with a 20% premium or higher were made for UK-listed companies. This was between March and June than any other period in recent years.
These “bear hug” offers have reached £44bn in total. Global firms are snapping up UK assets like Segro and Beazley. Even easyJet became a target for Castlelake and Apollo. The surge in interest helps boost confidence in the British market. But it also adds pressure on Chancellor John Healey to support financial services. These services have been pushed down government priorities.
In a bid to stabilize the City's position, Finance Minister Rachel Reeves announced that new companies listing on exchanges would get a three-year exemption from the 0.5% stamp duty on shares. This is part of a broader effort to retain investment within the UK and counter the trend of businesses shifting to New York.