We must act now to restore the City to its former glory, says Aquis stock exchange consultant DAVID BUIK
Rishi Sunak and Jeremy Hunt quickly undertook the task of restoring fiscal competence after the disastrous mini-Budget of Liz Truss and Kwasi Kwarteng.
But it is now time to start the recovery process with a high degree of urgency. Investment in the UK is inadequate.
The March Budget included modest stimulus for business, but it was way short of the mark required.
The business community was dismayed by the unnecessary hike in corporation tax from 19 per cent to 25 per cent, sending the wrong message to global investors.
We know Arm has been lost to the Nasdaq, with Flutter and CRH likely to follow. The regulatory authorities, at the behest of the Government, seem keen to ease the criteria for public quotation.
Lack of investment: The March Budget included modest stimulus for business, but it was way short of the mark required
However, considerable frustration has been expressed at the length of time it is taking to implement the easing of regulatory requirements.
Sir James Dyson recently accused the Government of ‘scandalous neglect’ of science and technology sectors.
This followed a similar criticism from Jan du Plessis, former chairman of BT, coupled with another from London Stock Exchange chief executive Julia Hoggett.
They have made damning comments that the ‘narrow British way of life’ is holding back the City’s competitive edge. Surely it is high time the Government responded positively to this level of inertia.
Despite the powerful flow of current negative commentary, the City’s stock exchanges – the LSE, AIM and the Aquis Stock Exchange – are well placed to deliver aspiring and innovative companies to the altar of public quotation, when economic and investment conditions improve.
They will be keen host IPOs and assist in reigniting the City’s prowess in financial services.
Aquis, a challenger focused on innovating the growth company listings space, believes there is no shortage of companies looking to raise their profile and to attract growth capital as part of a public market listing. Aquis has over 40 companies at various stages of exploring an IPO.
The UK is clearly a hub for new economy growth companies. Aquis has been particularly successful at attracting these in recent times.
It also has more established sectors in the pipeline, including retailers, professional service firms and accountancy firms.
And there are dual listings opportunities from overseas – so perhaps the outside world is not quite as negative on using London as a financial base as has appeared to be the case in recent months.
Sadly, commentary today seems to focus on why public markets are not attractive, rather than trying to accentuate the positives of a public market listing.
There needs to be a willingness to be more open-minded on company rules to make them more accessible and improve the way companies – particularly small and micro-cap – are traded.
Equipmake plc, a Norfolk-founded and Aquis-listed company is a classic example. It is a world-leading tech company, specialising in converting diesel engines into electric engines.
It floated last year valued at £35million. Equipmake today has a market value of £85million. It has made great strides and is in a great position should it need further capital in the future.
If improved investment incentives are forthcoming, the aspiring and innovative businesses are there to be developed, thus restoring the City to its former glory.
David Buik is a consultant to Aquis Exchange.