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London moves to revive its reputation as financial center
She inside, the online retail giant founded in China, had big ambitions to go public in New York. But as relations between Washington and Beijing soured, the ultra-fast fashion company began taking a closer look at an alternative plan across the Atlantic.
The company is now focusing more on the London Stock Exchange for its initial public offering, according to two people with knowledge of the matter. That may not have been the company’s initial choice – but it would be a big win for Britain, which has been wary of its capital losing its status as a global financial center.
Jeremy Hunt, Britain’s top finance official, allegedly courted Shein, anticipating that a major IPO would reinforce London’s position as one of the world’s leading financial centers. A spokeswoman for Shein declined to comment; the British Treasury also declined to comment.
In many ways, London remains a crucial financial center, where prices for precious metals are set daily, billions of dollars in foreign currency are traded, and global insurance contracts are concluded. But global competition for investors – between cities like New York, Hong Kong, Dubai and Singapore – is intense. Stock listing is a prominent business, and a major IPO like Shein’s can be seen as a prize that strengthens the local financial market and sets the stage for other companies to follow.
In an effort to bolster London’s position, British authorities are trying to reform the financial sector to make the city’s stock market more attractive to modern industries, especially technology companies, rather than relying on sectors such as banking. , which historically built London’s financial market. sector.
London’s reputation Financial services also suffered a blow following Britain’s exit from the European Union amid concerns that banks would move money and workers to the continent. Some of these fears were exaggerated, but Brexit has taken its toll. Amsterdam, for example, overtook London as Europe’s biggest stock trading center about three years ago, according to Cboe Global Markets.
The emphasis on attracting public listings to London is partly due to pride, said Gbenga Ibikunle, professor of finance at the University of Edinburgh’s Business School.
“London used to be recognized as the center of the financial world,” he said. “We know that this is no longer the case and this has been aggravated by the fact that we have left the EU and therefore there are a reduced number of negotiations, in terms of volumes, in London. And this also reduces part of the influence that the market has.”
Beyond pride, analysts say, there are good economic reasons to have a healthy pipeline of listings. On the one hand, they support a range of financial and professional services jobs, from bankers to lawyers. Public companies are also open to greater scrutiny, which can provide more information about the state of the economy.
Fears that London is losing its attractiveness for publicly listed companies have increased over the years as several companies, including building materials company CRH and betting operator Flutter Entertainment, have moved their main listings from London to New York. Others, like the oil giant Shellacknowledged studying the idea.
Those that left were also not replaced by a wave of companies that went public. Last year brought a significant blow when British computer chip company Arm listed its shares in New York. This offer, the largest in 2023, raised almost US$5 billion.
New York has been a long-time destination for IPOs. Many in the financial industry point to concerns that the London market, with its lower trading volume, will lead to lower valuations than the New York exchanges can provide.
There is an advantage to being listed alongside similar companies on the same exchange because the rising tide attracts more analysts and investors focused on those stocks, said Scott McCubbin, who leads EY’s IPO team in the UK and Ireland.
Part of the problem, analysts say, is that the London Stock Exchange is dominated by companies in older sectors such as banking, mining and oil and gas. Britain has struggled to attract listings from technology companies and high-profile failures have compounded the problem. Deliver, a London-based food delivery company, went public in 2021 and was called “the worst IPO in London history.” (Its shares are down 63% from their peak.)
“The rule change that’s happening now says we need to become much more attractive to technology companies, especially start-ups, especially companies that don’t have a long history of profitability,” McCubbin said. These are companies that are based on “what the next 10 years will be like, not what the last 10 years were like”.
But consultants caution that companies considering an IPO in New York must have some natural connection to the US market to benefit from trading there. Flutter, for example, generates more than a third of its revenue in the United States. Otherwise, investment fund managers would have little incentive to focus on small British companies at the expense of larger ones that are more relevant to Americans.
The slowdown in London offerings is part of an industry-wide shortage that has been going on for more than a year, amid high interest rates, conflict and geopolitical uncertainty. Only 16 companies went public in New York last year, an 84% drop compared to 2022, according to the London Stock Exchange Group; in comparison, 10 companies went public in London, a drop of 88%.
That said, companies that went public in New York last year raised a collective total of $9.5 billion, while those in London raised $442.7 million, according to data from the London Stock Exchange Group. Still, although London struggles to compete with New York, it is a much more popular destination than its European neighbors such as Paris and Amsterdam.
The British government has announced a series of reforms in recent years to encourage companies, especially technology start-ups, to raise capital through an IPO in London. For example, Britain reduced the number of shares a company is required to have in public hands from 25% to 10% and allowed certain dual-class listings at the premium end of the market, changes that are intended to encourage technology founders who may want to maintain greater control of their company after an IPO
Other planned changes are expected to make it easier for companies to make large acquisitions or other transactions without obtaining shareholder approval.
“We have seen some reforms already in place, but the vast majority are either on the horizon at the moment or planned but still to come,” said Julie Shacklady, director of UK Finance, a trade group. “So we’re still not really seeing the benefits of the full extent of the reforms.”
But she said she had “cautious optimism” about a market recovery later this year and did not expect an election, even one leading to a new government, to derail the changes.
In case of She inside, the company said part of the reason for going public is to be more transparent in the face of accusations of poor labor and environmental practices. London is considered to have high standards for businesses, with strict reporting requirements and new sustainability rules.
In addition to Shein, traders and market drivers in London point to other promising news for the British stock market. Raspberry Pi, a maker of low-cost computers, said it plans to go public on the London Stock Exchange.
A corporate consultant said a number of companies owned by private equity firms – which regularly take businesses they own public, providing a regular source of listings – could hit the London stock exchange from next year.
As companies debate whether to list in New York or London, Hunt and Bim Afolami, the Treasury minister, met this month with technology companies to promote Britain as a place to raise money.
“For a few years we have been self-destructing, but actually this year we are very optimistic that we have really turned the corner,” Afolami said at an event in London this month.
The spotlight next week will shift somewhat to the Federal Reserve’s second-quarter earnings season and monetary policy. Market watchers will be treated to results from several major names, including Dow 30 components Goldman Sachs (GS), UnitedHealth (UNH), Johnson & Johnson (JNJ) and American Express (AXP), along with streaming giant Netflix (NFLX).
The Fed will still attract some attention as investors will be eager to hear from a packed lineup of central bank speakers just before the policy meeting lockout period.
In terms of the economic calendar, after fifteen days of labor market and inflation indicators, activity data will gain momentum in the form of the latest retail sales and industrial production reports.
Earnings Highlight: Monday, July 15 – Goldman Sachs (GS) and BlackRock (Black). See the full earnings calendar.
Earnings Highlight: Tuesday, July 16 – UnitedHealth (UNH), Bank of America (BAC), Progressive (PGR), Morgan Stanley (IN), PNC Financial (PNC) and JB Hunt Transport (JBHT). See the full earnings calendar.
Earnings Highlight: Wednesday, July 17 – Johnson & Johnson (JNJ), US Bancorp (USB), Morgan Children (KMI), United Airlines (UAL) and Ally Financial (ALLY). See the full earnings calendar.
Earnings Highlight: Thursday, July 18 – Netflix (NFLX), Abbott Laboratories (ABT), Black stone (BX), Domino’s pizza (ZDP) and Taiwan Semiconductor Manufacturing (TSM). See the full earnings calendar.
Earnings Highlight: Friday, July 19 – American Express (AXP), Halliburton (THANKS) and Travelers (VRT (return to recoverable value)) See the full earnings calendar.
IPO Observation: Hospital and healthcare clinic operator Ardent Health Partners (TARDT), insurance service provider Twfg (TWFG) and the biotechnology company Lirum Therapeutics (LRTX) are expected to price their IPOs and begin trading next week. The analyst quiet period ends at Rectitude (RECT) to free up analysts to publish ratings.
Police cars outside the residence of Thomas Matthew Crooks, the suspected shooter at a Trump rally on Saturday, investigate the area in Pennsylvania. Following the incident, one rally attendee was killed, two rally attendees are in critical condition and Donald Trump suffered a non-fatal gunshot wound. The shooter is dead after being shot dead by the United States Secret Service. (Photo by Kyle Mazza/Anadolu via Getty Images)
Investors will initially favor traditional safe-haven assets and may lean toward trades more closely tied to former President Donald Trump’s chances of winning the White House after he survived an assassination attempt, according to market watchers.
“There will undoubtedly be some protectionist or safe-haven flows into Asia early this morning,” said Nick Twidale, chief market analyst at ATFX Global Markets. “I suspect gold could test all-time highs, we’ll see the yen being bought and the dollar, and flows into Treasuries as well.”
Early market commentary suggested Trump’s shooting at a rally in Pennsylvania on Saturday could also prompt traders to increase his likelihood of success in the November election. His support for looser fiscal policy and higher tariffs is generally seen as likely to benefit the dollar and weaken Treasuries.
An indicator of market sentiment heading into the weekend: Bitcoin surged above $60,000, likely reflecting Trump’s pro-crypto stance.
Other assets positively linked to the so-called Trump trade include stocks of energy companies, private prisons, credit card companies and health insurers.
Traders will also be closely watching market measures of expected volatility on Monday, such as those in the tariff-sensitive Chinese yuan and Mexican peso, which have begun to price in the U.S. vote.
Trump said he was shot in the right ear after a shooting at his rally. His campaign said in a statement that he was “fine” after the incident, which prompted him to rush off the stage.
“Currencies will be the first major market on Monday in Asia to react to the weekend’s shots. There’s potential for extra volatility, and getting a clear reading could be especially difficult because liquidity will be hurt by Japan’s national holiday,” said Garfield Reynolds, Asia team leader for Bloomberg Markets Live.
Strategists had already expected a volatile run-up to the election, particularly as Democrats are still agonizing over President Joe Biden’s candidacy after his poor performance in last month’s debate raised questions about his age. Investors were also grappling with the possibility that the election could end in a drawn-out dispute or political violence.
But there is little precedent for events like those in Pennsylvania. When President Ronald Reagan was shot four decades ago, the stock market plunged before closing early. The next day, March 31, 1981, the S&P 500 rose more than 1% and benchmark 10-year Treasury yields fell 9 basis points to 13.13%, according to data compiled by Bloomberg.
Bond investors should pay particular attention as the attack is likely to boost Trump’s election chances and ultimately lead to concerns about the fiscal outlook, according to Marko Papic, chief strategist at California-based BCA Research Inc.
“The bond market must at some point become aware of President Trump’s greater chances of winning the White House than any of his rivals,” Papic wrote. “And I continue to believe that as his chances increase, so too must the likelihood of a bond market revolt.”
Kyle Rodda, senior financial markets analyst at Capital.com, said he was seeing client flows into Bitcoin and gold following the shooting.
“This news marks a turning point in American policy norms,” he said. “For markets, it means safe-haven trades, but more tilted toward non-traditional safe-havens.”
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Jio Financial share price: Should you buy this Reliance group stock on Monday ahead of Q1 FY2024 results?
Q1 2024 Results: Jio Financial Share Price will be in focus on Monday as the Reliance Group company has a fixed board meeting on July 15, 2024 to consider and approve the company’s unaudited standalone and consolidated financial results. Trust Group company informed about the Q1 2024 Results date on Wednesday last week via an exchange filing. According to stock market experts, Jio Financial Services Limited is poised to deliver impressive Q1 results for FY25 on solid operating income. They have forecast a healthy QoQ PAT for the company in Q1 FY25.
Jio Financial Services News
Speaking on the Jio Financial Services Q1 2024 results, Manish Chowdhury, Head of Research, StoxBox, said, “We believe Jio Financial Services is poised to deliver impressive results in Q1FY25 aided by its operating income, which is likely to show robust growth driven by strong investment income, which in turn should lead to healthy PAT growth on a sequential basis. Jio Financial Services continues to make strategic moves such as launching digital products and expanding its ecosystem, with a clear focus on future growth. The company has announced plans to introduce products for lending against stocks and mutual funds, leveraging Jio’s large user base, which could be a significant growth driver in the coming quarters.”
“Furthermore, with the NBFC receiving RBI approval to become a primary investment company, Jio Financial Services is well-positioned to unlock value from its investments. Overall, we expect the company to report robust numbers in the upcoming quarter,” the StoxBox expert added.
Jio Financial Stock Target Price
Speaking about the technical outlook of Jio Financial share price, Ganesh Dongre, Senior Manager, Technical Research at Anand Rathi, said, “Jio Financial Services share price is poised to make a fresh high at the ₹260 apiece level. If the stock breaks above this mark, the Reliance Group stock could make a fresh high by touching the ₹290-₹295 zone. Hence, those with Jio Finance stock in their portfolio are advised to stick to the script by keeping a stop loss at ₹205. If the stock breaks above ₹260 decisively, then one can upgrade the stop loss at ₹240 for the near-term target of ₹295.”
On the advice to new buyers regarding Jio Financial stock, Ganesh Dongre said, “New buyers are advised to wait for the breakout. Once the stock breaks above â‚ą260, one can buy this Reliance Group stock at the short term target of â‚ą295, keeping a stop loss of â‚ą240 apiece.”
Disclaimer: The views and recommendations made above are those of individual analysts or brokerage firms, and not of Mint. Investors are advised to consult with certified experts before making any investment decisions.
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