[News] Global Stock Market: London Loses Top Spot

[Mr.Hacker]

Reuters reports London lost its spot as the top global stock market, now tied with New York City. According to data benchmarks collected by the city, 2023 is the first year London isn’t the clear global leader. Enough international companies sought U.S. listings that England’s capital lost its dominance as the sole leading global financial center.

What made London lose its spot as the top global stock market? 
According to Financial Times, Brexit, the United Kingdom’s departure from the European Union, forced several companies to move operations. Additionally, New York’s lighter regulations and potentially higher valuations make the Big Apple more attractive for global companies to list.

However, it’s not just companies based outside of the United Kindom that are leaving London’s stock exchange. For example, CNBC reports the Cambridge, England-based semiconductor chip and software designer, Arm, ditched London in favor of the NYSE. 

The company’s departure from the FTSE was a significant blow to the financial center. 95% of the world’s smartphones, including iPhones, use Arm’s semiconductor chip designs. Unfortunately, the company left the U.K.’s financial center despite British Prime Minister Rishi Sunak’s best efforts.

“After engagement with the British Government and the [Financial Conduct Authority] over several months,” said Arm CEO Rene Haas. “[We have] determined that pursuing a U.S.-only listing of Arm in 2023 is the best path forward.”

The city’s future as a dominant force in global finance is uncertain.
CNN reports Arm’s departure from London could lead other domestic companies to consider following suit. Britain’s financial services sector makes up over 8% of the United Kingdom’s GDP and about 10% of the country’s tax revenue.

 Companies see the U.K. capital as a great place to garner start-up capital and launch a business. However, the financial center falls behind when it comes to growing a business, according to Aquist Exchange CEO Alasdair Haynes. He says the U.K. needs to make it easier for smaller companies to list. “It doesn’t mean lowering standards,” Haynes said. “It means rules should be proportionate and appropriate for the size of the business.”