The decline of the London Stock Exchange (LSE) can be attributed to a lack of liquidity, primarily stemming from a subdued investment culture in the UK, according to Carrie Osman, founder and CEO of growth consultancy Cruxy. Osman highlighted the challenges faced by companies in choosing to list or delist, with liquidity emerging as a critical concern.
Osman emphasized that the LSE lacks the vibrancy and investor appetite seen in other markets like the US, where a higher percentage of adults engage in stock investments. She underscored the importance of garnering support from investors willing to back innovative technologies, a sentiment echoed in the recent acquisition of UK-based Alphawave Semi by Qualcomm, which further underscores the challenges faced by the LSE.
Reflecting on the broader European landscape, Osman noted that a significant portion of European listings are not listed on their home turf, indicating a widespread trend beyond the UK. This trend raises questions about the competitiveness and attractiveness of European exchanges compared to global counterparts.
Osman proposed strategies to stimulate investment culture in the UK, drawing parallels with the US where initiatives like the 401(k) retirement savings plan expose individuals to investing. She suggested educational interventions to enhance market literacy, alongside tax incentives to encourage both companies and individuals to participate actively in financial markets.
Highlighting the Private Intermittent Securities and Capital Exchange System (PISCES) as a potential catalyst for increased investment, Osman outlined how this new private stock market could offer investors more opportunities to engage with growing companies. However, she raised concerns about the regulatory complexities and potential limitations of this system in driving the desired liquidity.
Osman’s insights shed light on the underlying factors contributing to the LSE’s decline and point towards the need for strategic interventions to revitalize the exchange and bolster investor confidence. The evolving landscape of financial markets underscores the importance of adapting to changing investor behaviors and market dynamics to ensure sustained growth and competitiveness.
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