Peel Hunt chief: If you give a sh*t about the City, you should be very alarmed
The boss of Peel Hunt has said the City “should be very alarmed” about its future as he defended a string of warnings issued by the investment bank over the state of the UK’s capital markets.
The London-listed bank, which last week revealed its losses had more than doubled last year, has been among the loudest voices sounding the alarm on London after a drop-off in capital markets activity and dearth of new listings.
In a series of notes to investors, Peel Hunt has warned of a “relentless” exodus from the London Stock Exchange and said the smaller end of the bourse was at risk of being gutted without fast action from regulators and the government.
However, the tone of the missives has unsettled some in the Square Mile, who warn the bank’s comments risk fuelling the negative narrative that has engulfed the capital in recent months.
Speaking with City PM, Peel Hunt’s chief Steven Fine defended the claims and said the London Stock Exchange was at risk of being “hollowed out”.
“To me, the question is really simply, do you believe that there is a future for public markets in the UK? Because if you do, you should be very alarmed by the sheer scale and the size of the companies that are exiting, and the lack of replenishment,” Fine told City PM
“If you don’t care, if you’re in the camp that says I don’t really give a sh*t – excuse my language – then that’s fine. But if you do care, you should look at the 100 companies that have left.”
Fine added there will “always be a FTSE 350” but the “hollowing out of the ecosystem” that supports smaller companies is “damaging”.
“If you don’t care, if you’re in the camp that says I don’t really give a sh*t – excuse my language – then that’s fine. But if you do care, you should look at the 100 companies that have left.”
Peel Hunt’s chief Steven Fine
The comments point to the exodus of companies from the London Stock Exchange, particularly its junior AIM market, where mid-market firms like Peel Hunt make the lion’s share of their money.
In its full-year results last week, the bank said it slipped to a £3.3m loss in the year to March, down from a £1.5m loss in 2023, with “continued cost pressures” blamed for offsetting a 4.3 per cent rise in revenues to £85.8m.
Mid-market banks and brokers have been starved of business in London after just 23 firms floated on the London Stock Exchange last year, down some 60 per cent on an already quiet 2022.
However, Fine said there were now promising signs of a recovery on the horizon.
“The UK market is feeling like it’s about to turn and reassert itself,” he added.
The market has been buoyed by the prospect of a bumper float from fast fashion giant Shein and the successful debut of computer maker RaspberryPi in recent weeks, a deal brokered by Peel Hunt.
“If you had to pick a poster child of a company that you wanted to reopen the the IPO market, you could not have picked better than a company like Raspberry Pi,” Fine said, pointing to the fact it was a UK-based tech company.