Britain’s beleaguered stock market enjoyed a reprieve after a three-and-a-half year exodus as investors piled £317million into equity funds last month.
Figures published yesterday by funds network Calastone showed London-listed shares enjoyed inflows for the first time since May 2021.
However it barely made a dent in the £25.3billion pulled out since then. And Calastone’s global head of markets, Edward Glyn, warned that it was likely to be a temporary reprieve.
‘The inflow is likely to be a hiatus rather than a break in the trend,’ he said. ‘There is no major catalyst on the horizon to prompt a wholesale resurgence of interest in the much-unloved UK stock market.’
In November, investors ploughed into equity investment funds – both UK and overseas – with overall inflows soaring to a record £3.1billion.
That reversed record withdrawals in October as they tried to escape capital gains tax hikes in the Budget.
Turning point? Figures published by funds network Calastone provided a rare positive for London-listed shares as the market enjoyed inflows for the first time since May 2021
Steven Fine, chief executive of broker Peel Hunt, last week voiced alarm that money was ‘draining out’ of UK funds.
The trend reflects the declining market, which has struggled to attract flotations and seen an exodus of listings due to takeovers and defections to stock exchanges overseas.
Yesterday, Bloomberg data showed 45 companies have delisted from London this year, up 10 per cent on last year.
In comparison, latest EY figures show just ten companies either joined the London Stock Exchange or AIM, its junior market, in the first nine months of the year.
The firms to have left this year include Virgin Money – bought by Nationwide for £2.9billion – and cybersecurity group Darktrace and Keywords Studios, taken over by private equity firms in deals worth £4.3billion and £2.1billion respectively.
The exodus is set to continue, as Royal Mail’s £3.6billion takeover by Czech billionaire Daniel Kretinsky awaits government approval, while Carlsberg has a £3.3billion deal in place to acquire Britvic.
And yesterday, digital training group Learning Technologies agreed an £802million takeover by a US private equity firm
AJ Bell investment director Russ Mould said: ‘The takeovers are the results of 15, 20-year trends and it is going to take something big to reverse this.’
Veteran City commentator David Buik said: ‘Britain has many world-class, innovative small to medium sized businesses and this is where we need to concentrate as this is where the future lies.
‘If we give them support, it will boost growth.’
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