By Charlie Conchie
The London Stock Exchange and Arm would have been slammed by UK media if the chipmaker had floated in London and slumped below its IPO price, the boss of the London Stock Exchange Group has claimed.
Cambridge tech giant Arm was subject to a major charm offensive from the UK government and London Stock Exchange but dealt a blow to the City when it opted to debut on New York’s Nasdaq exchange.
The firm floated at a value of £43.6bn in September but has since dipped 14 per cent below that price after an initial surge in value.
David Schwimmer, the chief of the London Stock Exchange’s parent group LSEG, today suggested that British media would have criticised the slide in value but instead the response has been muted.
“I have not heard any criticism of the US market or the exchange on which [Arm] was listed, or any of that downsizing [in value] or performance below the IPO,” Schwimmer said in response to a question from City A.M..
“I would just ask the question – if that happened here, what do you think?”
Schwimmer said that British media had a “very different media and cultural environment” to the rest of the world and suggested that media in the UK was more critical of listed companies.
The comments come amid a growing wave of attacks from the City toward the media in the UK over what is perceived to be an overly negative environment for UK companies.
The boss of the London Stock Exchange Group, Julia Hoggett, told City A.M. in September that the “context is missing” from reporting around capital markets in the UK and “people have narratives in their heads and are looking for things to fulfil it”.
Fears have been swirling around the capital over the health of the UK markets after a drop-off in listings this year.
Over the first three quarters of 2023, just 23 firms listed in London, raising £953m, compared with 34 IPOs raising £1.16bn over the same period in an already subdued 2022, according to data from EY.
The slowdown has triggered a slew of reviews into the health of the UK’s capital markets and regulators and government have pushed ahead with changes to try and boost their appeal.
The Financial Conduct Authority has merged the premium and standard segments of the market and is looking to streamline areas like the prospectus regime to tempt more firms into floating.
The government is also pushing ahead with reforms to the pension market to try and get more domestic capital flowing into London-listed firms.
Pension cash has been seen as potentially a key remedy to a dearth of capital flowing into the market. Since 2002, pension fund holding of equities has slid from around 39 per cent of the market to around just four per cent.
Speaking to reporters today, Schwimmer said the market could see quick benefits if more pension cash begun to flow in.
“I think if there’s capital that starts to be allocated more to UK companies, I think you’ll start to see the benefits of that in relatively short order, over the next year or two or three,” Schwimmer told reporters.
