The contraction of the London Stock Exchange is being driven by a severe shortage of initial public offerings rather than an exodus of companies via takeovers, according to analysis from Cityam.
This finding challenges the prevailing narrative that M&A activity is the primary cause of the market’s shrinking footprint.
London’s position as a premier global listing hub is under significant strain.
A prolonged drought in IPOs has exposed deep-seated structural weaknesses in Britain’s capital markets, with the city losing ground to competitors in attracting new growth companies.
The lack of fresh listings is the critical factor undermining market depth and liquidity.
While takeover activity remains high, it is not the root cause of the shrinkage.