Stamp duty holiday first ‘meaningful change’ in a long time, says London Stock Exchange boss
The London Stock Exchange has welcomed the government’s move to grant a stamp duty holiday to newly-listed entrants, hailing it the first “meaningful change” seen in a long time.
Chancellor Rachel Reeves launched a three year stamp duty holiday for fresh listings on the London market in her Budget last month.
The Treasury’s plans have seen the 0.5 per cent charge paid by investors when purchasing shares in newly listed companies for the three years following their IPO be scrapped.
The move was highly anticipated across the City in hopes it will revitalise the ailing market and attract listings which had been lost to overseas markets who had more favourable conditions, in particular New York.
It has also been welcomed by the stock exchange itself, with LSE deputy chief executive Charlie Walker hailing the move.
Speaking to City PM, Walker said: “It’s great the government’s making an exemption for all IPOs on the London Stock Exchange.
“It’s a recognition of the important role that the UK capital markets can play in driving growth of the economy.”
“Obviously, we’d like to see it go furher…but this is the first sort of meaningful change that we’ve seen in quite a long time.”
Investors are also increasingly optimistic on UK IPOs in 2026, with over 30 per cent expecting to see between 51 and 70 IPOs across the market next year, according to the investor survey from Edelman Smithfield.
Encourage domestic investing
The holiday is also part of the government’s bid to push more Brits into investing in the UK, with the Chancellor also slashing the cash ISA ceiling to £12,000 to push people into opening a stocks and shares ISA.
Walker also noted the importance of changes to pension legislation, aimed at increasing the amount of investment from pension funds in the UK.
This includes the Mansion House Accords, which saw major UK pension providers commit to investing at least 10 per cent of their pension funds by 2030, with 5 per cent committed to the UK.
He said: “The pensions bill…that’s a meaningful step forward.
“The Mansion House Accord will drive more British capital into UK scale ups. A lot has bene done, but there’s a lot more that could be done.”
The FTSE’s hidden gems
UK analysts and portfolio managers are also hailing small caps at the exchange’s ‘hidden gems’, noting the AIM market’s vitality in boosting retail investment.
AIM is the largest growth market in Europe, with the market being home to approximately a third of all companies listed on the LSE.
But, small caps have struggled in recent years, weighed down by weak investor sentiment and a lack of inflows, resulting in valuations hitting significant lows.
The junior exchange has seen scores of firms quit the public markets, with the number of AIM constituents falling to 688 at the end of 2024 down from a significant high of roughly 1,700 at the market’s peak in 2007.
However, investors can capitalise on undervalued prices, as small caps are able to develop and grow in value at a faster pace where large companies might struggle to hit fresh highs.
Small caps mainly operate in niche industries, such as biotech and clean energy, and tend to be overlooked by institutional investors, allowing retail investors who spot the undervalued stocks to take advantage before others notice.
Walker said: “We’ve got something very special in the UK in this great market, there’s a lot of changes being made at the moment.”
Walker added the exchange had just finished a consultation on the market which looked at the “regulatory environment” and aims to “provide the flexibility for small and mid-cap companies to grow on the public markets”.