The allure of London for international companies and investors
As one of the world’s largest financial markets, the UK has a powerful reputation among both international investors and companies. It boasts high standards of regulation and governance, strong financial networks and liquidity - among many other attractions.
Our latest research, Raised in London 2024, which is based on a survey of over 150 FTSE leaders, revealed a high level of confidence in London’s international appeal to both overseas institutions and companies looking to invest or raise capital.
More than three-quarters (77%) of FTSE leaders said they expected foreign institutional investment in UK equities to increase over the next two years. An even higher proportion (92%) said they expected the number of foreign issuers coming to London to increase over the same period. This anticipated increase in interest is already starting to play out in the UK capital markets - with London being the third most active market globally for total equity issuance this year, and more international companies listed in London than on any other major exchange.1
International issuer appeal
These international companies are welcomed by FTSE leaders. Three-quarters (75%) of them think having more international issuers listing in the UK will help fortify London’s future as a leading global financial centre. FTSE leaders also identified the key attractions of the UK’s public markets, with high quality regulation, strong financial networks and good governance topping the list. The number of top-quality companies, market transparency and liquidity, along with the excellent financial services support network were other appealing aspects. However, our research also highlighted the need for balance, with a number of respondents saying that UK governance standards need to be streamlined.
The overwhelming sentiment in relation to London’s position on the global stage was positive – and this is supported by recent market activity. In the first half of 2024, £18.4bn of equity capital was raised on the London Stock Exchange, a figure exceeded only by the US and India.2
'High-quality regulation and governance attract international investors and boost liquidity. International capital and liquidity in London attract top quality issuers.' Mark Hankinson, Co-Head of Equity Capital Markets
London welcomes international investors
The benefits of international investors are well recognised by FTSE leaders, with almost three-quarters (72%) saying the more international investor base of London is a positive for their business. Improving the liquidity of their shares was the biggest positive (67%) cited by respondents, followed closely by diversification of the investor base (61%). The findings demonstrate the virtuous circle between investors and companies at work in the London market, since high levels of liquidity was identified as one of its attractions to foreign investors.
A small proportion (6%) of FTSE leaders felt foreign investors on their share registers created challenges, mainly around communication with remote investors and the extra factors, such as FX rates, which such investors needed to consider.
Success can breed success – if we nurture it
Raised in London 2024 paints a highly positive picture of the UK financial market’s attractions for both companies and investors, and highlights the positive feedback loops at work. High-quality regulation and governance attract international investors and boost liquidity. International capital and liquidity in London attract top quality issuers. These factors have also created a wide financial network and a strong ecosystem of financial expertise and support services.
Competition between capital market venues is intense and the UK cannot afford to be complacent, which is why our report includes several recommendations for action. But, as the findings of our research confirm, the UK’s international status is built on strong foundations and there is an opportunity for this market to play an even greater role on the world’s financial stage.
1London Stock Exchange, ‘Global Leader for Capital Markets’ - PDF report (June 2024)
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As one of the world’s largest financial markets, the UK has a powerful reputation among both international investors and companies. It boasts high standards of regulation and governance, strong financial networks and liquidity - among many other attractions.
More than three-quarters (77%) of FTSE leaders said they expected foreign institutional investment in UK equities to increase over the next two years. An even higher proportion (92%) said they expected the number of foreign issuers coming to London to increase over the same period. This anticipated increase in interest is already starting to play out in the UK capital markets - with London being the third most active market globally for total equity issuance this year, and more international companies listed in London than on any other major exchange.1
International issuer appeal
These international companies are welcomed by FTSE leaders. Three-quarters (75%) of them think having more international issuers listing in the UK will help fortify London’s future as a leading global financial centre. FTSE leaders also identified the key attractions of the UK’s public markets, with high quality regulation, strong financial networks and good governance topping the list. The number of top-quality companies, market transparency and liquidity, along with the excellent financial services support network were other appealing aspects. However, our research also highlighted the need for balance, with a number of respondents saying that UK governance standards need to be streamlined.
The overwhelming sentiment in relation to London’s position on the global stage was positive – and this is supported by recent market activity. In the first half of 2024, £18.4bn of equity capital was raised on the London Stock Exchange, a figure exceeded only by the US and India.2
London welcomes international investors
The benefits of international investors are well recognised by FTSE leaders, with almost three-quarters (72%) saying the more international investor base of London is a positive for their business. Improving the liquidity of their shares was the biggest positive (67%) cited by respondents, followed closely by diversification of the investor base (61%). The findings demonstrate the virtuous circle between investors and companies at work in the London market, since high levels of liquidity was identified as one of its attractions to foreign investors.
A small proportion (6%) of FTSE leaders felt foreign investors on their share registers created challenges, mainly around communication with remote investors and the extra factors, such as FX rates, which such investors needed to consider.
Success can breed success – if we nurture it
Raised in London 2024 paints a highly positive picture of the UK financial market’s attractions for both companies and investors, and highlights the positive feedback loops at work. High-quality regulation and governance attract international investors and boost liquidity. International capital and liquidity in London attract top quality issuers. These factors have also created a wide financial network and a strong ecosystem of financial expertise and support services.
Competition between capital market venues is intense and the UK cannot afford to be complacent, which is why our report includes several recommendations for action. But, as the findings of our research confirm, the UK’s international status is built on strong foundations and there is an opportunity for this market to play an even greater role on the world’s financial stage.
1London Stock Exchange, ‘Global Leader for Capital Markets’ - PDF report (June 2024)
2LSE, June 2024 report