UK stock market revival: Why London needs to win back listings from New York​

​​​A decade of declining listings hits London hard

​The UK equity market has witnessed a significant erosion in its listing base over the past ten years, with the number of publicly traded companies on the London Stock Exchange (LSE) shrinking by around 25%.

​Following a post-pandemic initial public offering (IPO) surge in 2021 - with 126 listings raising £16.9 billion - the market experienced a dramatic downturn. In 2022, IPOs collapsed to just 45, raising only £1.6 billion, marking a 62% drop in listings and a 90% decline in proceeds.

​By 2023, the downturn deepened further, 23 new listings raised a meagre £953.7 million, down 49% in volume and 40% in capital raised.

​The situation got even worse in 2024, delivering the lowest IPO tally since the global financial crisis: only 18 listings raised a meagre £777.7 million.

​UK IPO Market: Number of listings and capital raised (2021-2024) 

​Clearly, 2024 was a particularly subdued year both in issuance and capital raised, reflecting a broader global slowdown and signalling challenges for the UK as a listing destination.

​Meanwhile, the UK's junior AIM market is under acute pressure, with the number of firms valued over £1 billion plunging by 80%, leaving just six on the index today. This decline represents a significant erosion of the growth company ecosystem that AIM was designed to support.

​High-profile exits highlight competitive challenges

​Several high-profile British companies have opted to list abroad, particularly in the United States, where deeper capital markets and higher valuations are luring them across the Atlantic. 

​Arm Holdings listed on Nasdaq 100 in 2023, securing $4.87 billion and citing better valuations and a larger investor base. Wise (formerly TransferWise) moved its primary listing to New York to access greater liquidity and broader capital pools.

​Ashtead, a FTSE 100 member that derives most of its revenue from the US, transitioned its main listing to the New York Stock Exchange (NYSE). Other notable examples include Flutter, CRH, Indivior, and Cobalt, which have all cited low London trading volumes, valuation discounts, and investor alignment as reasons for shifting their focus overseas.

​These departures represent not just individual company decisions, but a broader trend that reflects structural challenges in the UK market's ability to compete with international alternatives, particularly the deep and liquid US capital markets.

​London's enduring advantages remain compelling

​Despite current challenges, London retains significant competitive advantages that should not be overlooked. IPO underwriting fees are notably cheaper in the UK, typically between 3%-5% compared to 6%-7% in the US, providing meaningful cost savings for companies raising capital.

​Legal exposure is also lower, with just five class actions filed in the UK since 2008, compared to 215 in the US in 2023 alone. This reduced litigation risk provides a more predictable operating environment for public companies.

​The UK boasts a strong institutional investor base and greater opportunities for companies to be included in FTSE indices, which boosts demand from passive funds and provides natural buying support for new listings.

​UK-headquartered firms, particularly those in financial services, manufacturing, and industrial sectors, are well-matched to London's investor ecosystem, which has deep expertise in these traditional British strengths. 

​Success stories demonstrate London's potential

​Not all companies are fleeing London's markets. The IPO of Darktrace PLC in April 2021 was widely regarded as one of the most successful UK listings in recent years, particularly during a period when London was striving to attract more high-growth technology companies to its public markets.  

​Valued at approximately £1.7 billion at the time of listing, the cybersecurity firm’s shares soared over 40% on their first day of trading, signalling robust investor appetite for artificial intelligence (AI)-driven technology solutions amid rising global cyber threats. The strong debut underscored the market’s confidence in Darktrace’s innovative platform, which uses machine learning and AI to autonomously detect and respond to cyberattacks across complex digital environments.

​Darktrace’s success can be attributed to several key factors. Firstly, it operates in a high-demand sector – cybersecurity - which has seen growing urgency and investment globally due to increasingly sophisticated digital threats. Secondly, the company was able to differentiate itself with proprietary AI technology, positioning itself not just as another security vendor but as a pioneer in autonomous defence. Additionally, the listing came at a time when UK regulators were encouraging more tech IPOs in London, making Darktrace a bellwether for the city’s ambitions to remain globally competitive post-Brexit.

​Despite some controversies surrounding its early backers, particularly its ties to tech entrepreneur Mike Lynch, Darktrace has continued to attract institutional interest and post-IPO performance remained relatively strong in its first year. The successful flotation was seen as a win for the LSE, proving that innovative, high-growth tech companies could thrive in the UK capital markets.

​Other examples of successful London-listed companies, such Haleon’s July 2022 listing – with approximately £30 billion the largest London listing in over a decade -  continue to generate attractive returns for investors, proving that the market's structural advantages can still deliver when companies execute effectively on their business strategies. 

​These success stories provide important evidence that London's challenges are not insurmountable and that the right companies can still thrive in the UK public market environment.

​Reform momentum builds for market revival

​Regulatory updates - including support for dual-class share structures and reduced stamp duty - signal a policy shift designed to attract growth-stage and founder-led firms. These changes address some of the structural disadvantages that have driven companies to consider overseas listings.

​To revitalise the UK equity market and entice companies to stay or list locally, key actions are needed including improving market liquidity by unlocking pension fund capital and incentivising domestic equity investment through tax breaks and policy support. 

​Streamlining regulation by eliminating excessive bureaucracy, simplifying disclosure rules, and supporting founder-friendly governance structures could remove barriers that have deterred growth companies from choosing London.

​Promoting UK success stories like Haleon to demonstrate the upside of staying listed in London, while strengthening the pre-IPO pipeline by providing targeted support to high-growth UK firms in fintech, clean tech, and biotech could encourage more local IPOs.

​Early signs of 2025 turnaround emerge

​Despite a subdued 2024 - with only £777.7 million raised from 18 IPOs, down from £953.7 million across 23 in 2023 - the fourth quarter of 2024 showed signs of improvement, with eight IPOs - three on the Main Market and five on AIM.  

​Notably, the listing of Canal+ in mid-December 2024 was the largest debut on the LSE since 2022 with a market capitalisation of approximately £2.5 billion, providing a modest boost to the market's performance.  

​However, despite high expectations, the stock faced immediate pressure, closing down around 16% on its debut day. Analysts attributed this decline to factors such as index exclusion and post-demerger share rebalancing. Nonetheless, the listing was seen as a significant boost for London's IPO market.

​Early 2025 may signal a turning point for London's listing market with several high-profile companies like the Singapore-headquartered fast-fashion giant Shein, the UK-based digital bank Monzo, the renowned UK bookstore chain Waterstone, and the Scottish craft beer company BrewDog, to name but a few, having expressed intentions to list on the LSE later this year.  

​Also, in the first half of 2025 UK equity funds saw net inflows for the first time in 42 months, suggesting that investor sentiment toward UK equities may be stabilising. New FCA listing reforms and improving political stability are restoring investor confidence after years of uncertainty.

​Meanwhile, several UK firms - ITV, B&M, Burberry, Diageo, and Whitbread - are being closely watched as potential M&A targets, drawing fresh investor interest and potentially supporting share prices across the market.

​The LSE is not alone, though, with Europe's second largest 2024 IPO - CVC's €2 billion float in Amsterdam - illustrating intense competition among financial centres. To remain competitive, London must continuously innovate, liberalise regulations, and reinforce its global proposition.

​Investment opportunities in London's revival

​For investors looking to capitalise on a potential revival in London's equity markets, several approaches merit consideration as conditions potentially improve.

1. Research the UK listing landscape, regulatory changes, and pipeline of potential IPOs to understand the opportunities and challenges in the market.
2. ​Consider how improving market conditions and regulatory reforms might create opportunities in both established and emerging UK companies.
3. ​Open an account with IG by visiting our website and completing the application process.
4. ​Access UK equity markets through our platform, including both FTSE 100 and FTSE 250 companies, as well as AIM-listed growth stocks.
5. ​Implement appropriate diversification and risk management given the ongoing challenges facing UK markets.

​Share dealing provides direct access to UK shares for investors who believe in London's long-term revival prospects.  

​Spread betting and CFD trading offer flexible approaches for trading around market developments and potential IPO activity.

​The UK stock market is at a crossroads. Years of decline have made way for foreign listings and investor hesitancy. Yet, London still holds unique structural advantages: low costs, legal predictability, index visibility, and a compelling policy roadmap.

​With the right reforms and a renewed commitment to nurturing domestic champions, the City has every chance to reassert itself as a premier global listing venue. The future of London as a financial powerhouse depends on turning today's cautious optimism into decisive action that attracts both domestic and international companies back to UK markets.​​