Mark Kleinman: Reeves’ City IPO push still lacks momentum
Mark Kleinman is Sky News’ City Editor and the man who gets the Square Mile talking in his weekly City PM column
Reeves’ City IPO push still lacks momentum
It’s the City’s most oft-recurring question: how do you reverse the alarming decline in London’s attractiveness as a destination for IPOs?
The bald statistics legitimise the urgency of the question. Data compiled by EY, the professional services firm, shows that in the first quarter of this year, only five companies listed on the London stock market. Collectively, they raised just £74.7m in proceeds – a 74 per cent year-on-year fall in the same period in 2024.
Suddenly, the hope that a poster-child in the form of Shein, the Chinese-founded online fashion retailer, might be the panacea to London’s listing struggles appear to be fading into the distance. At the very least, investors will need clarity about the enduring impact of Donald Trump’s tariffs regime before deciding whether to back a Shein flotation, and at what valuation.
Last week, Emma Reynolds met executives from technology companies including Monzo, Oaknorth, Quantexa and Revolut to seek to address London’s IPO conundrum.
Ministers’ level of engagement with industry, at least, can’t be faulted – both Reynolds and the chancellor, Rachel Reeves, have held numerous roundtable meetings with company bosses since taking up their roles.
The prospect of meaningful action remains unclear, however. In last week’s meeting, executives cited the need for tax breaks both on buying UK shares and a capital gains tax cut for employees when offloading their stock, according to people close to the discussions. They also called for restrictions on non-executive directors holding – or being paid in – shares in order to give them a greater incentive to benefit from the growth of their businesses to be removed.
One of those who attended the meeting put it starkly: unless a cluster of the companies represented in the room choose to list in London, the potential for any real momentum to be injected back into UK markets will be severely curtailed, they warned. For that to happen, though, they will need significantly greater incentives than those currently on offer.
Of the companies whose bosses met Reynolds last week, only Monzo looks more likely than not to float in London. Oaknorth and Revolut appear more likely bets for a New York listing – it’s hard to see that changing, no matter how many times they’re called in to see government ministers.
Telegraph sale may finally be on the last page
It was a policy announcement from the Department for Culture, Media and Sport, but it had the hands of the Foreign Office all over it.
Last week’s decision that foreign state investors would be allowed to own up to 15 per cent of British national newspapers, rather than the current outright ban or a previously proposed threshold of five per cent or 10 per cent, appeared tailor-made for the Abu Dhabi-based vehicle which remains keen to hold a stake in The Daily Telegraph.
“We are fully upholding the need to safeguard our news media from foreign state control whilst recognising that news organisations must be able to raise vital funding,” Lisa Nandy, the culture secretary, said.
The prospect of Abu Dhabi royal family-controlled IMI owning 15 per cent of the Telegraph titles has not pleased everyone – notably Fraser Nelson, the former Spectator editor, who labelled it a chilling affront to democracy.
The government’s decision undoubtedly lays an easier path to a deal which has been protracted to the point of torture over a two-year period.
Under plans that were in advanced discussion as recently as a week ago, IMI’s 15 per cent stake would be accompanied by RedBird Capital owning 75 per cent (with the possibility of part of that being syndicated to other investors) and Lord Rothermere’s Daily Mail publisher, DMGT, holding just under 10 per cent.
Some uncertainty surrounds the final part of that triumvirate, with one person close to the situation claiming this week that DMGT might ultimately not be involved.
Nevertheless, the protagonists were hopeful that a deal might be announced as soon as today, with a further regulatory review process inevitably delaying its conclusion. For Telegraph journalists, the end of that journey cannot come a moment too soon.
FSB right to be on warpath over HMRC’s poor track record
Governments like to trumpet the unproven mantra that Britain is the best place in the world to start a business. The best place in the world to run a small business, though? That’s a different matter. Growing levels of bureaucracy, a rising tax burden and a volatile economy have been shaking SME confidence for years.
Chief among the most common complaints is the difficulty of dealing with HMRC – something FSB, the justifiably voluble lobbying group, is now turning its attention to.
In a letter sent last week to James Murray, the exchequer secretary to the Treasury, FSB is urging the Treasury to impose a growth duty on HMRC consistent with its new approach to economic regulators. Moreover, it wants the Valuation Office Agency – which plays a key role in imposing business rates and is due to me merged into HMRC – to be overhauled.
“VOA’s check, challenge, appeal process has been broadly seen as unworkable and impenetrable,” FSB told Murray. “The move to more frequent revaluations should be accelerated in the new structure.”
It added: “Given our concerns about how HMRC currently operate, we would be keen to see commitments around improving the current service from VOA, within the new structure – rather than expanding HMRC’s poor levels of customer service to the VOA.”
FSB is right – sadly, it shouldn’t hold its breath to see the changes it’s seeking.