City chiefs lament London Stock Exchange ‘doom loop’ after bruising exits

Two top City figures have taken aim at the “doom loop” and negative media narrative gripping the London Stock Exchange after a bruising week of headlines for the bourse.

Neil Shah, who leads the London Stock Exchange’s outreach to tech firms, said yesterday people should “look beyond headlines and basket cases” after the exchange was hit by a flurry of de-listings and barbs from companies over the past seven days.

“Anyone who’s been watching closely will be familiar with the massive reform agenda and work of the Capital Markets Industry Taskforce and these reforms can’t come soon enough,” Shah wrote on LinkedIn.

“There’s always light at the end of the tunnel. Don’t lose your head amongst all the doom-mongering.”

The comments came after the London Stock Exchange suffered a series of exits this week, with AIM-listed E-Therapeutics describing the market as “broken and closed” as it announced its departure, citing a lack of investor interest.

The exit marks the 15th from the junior AIM market in the opening months of the year alongside a slump in fresh listings. Five firms have floated on both the main market and AIM this year.

Capital markets figures and regulators have fired a series of barbs at the negative media narrative around the City over the past 12 months.

Speaking with City A.M. in September, London Stock Exchange boss Julia Hoggett took aim the coverage around the City and said  “people have narratives in their heads and are looking for things to fulfil it rather than anything else.”

A report from industry body UK Finance last year claimed the “perception of the approach and attitude of the media had an oversized influence when considering whether to join the UK markets”, with some companies saying their approach was to join the UK in ‘stealth mode’ to “avoid the news cycle and potential negative public sentiment.” 

Shah’s comments were echoed by capital markets guru Mark Austin yesterday, who said the “doom loop” surrounding the market is “overdone, not representative of the facts on the ground and not helpful”.

“The changes that we have made and how they all fit together and what they mean as a package are being noticed and acted on. Investors and issuers are listening and agreeing and the narrative is changing,” Austin wrote. 

Austin authored one of a host of deepdives into the state of UK capital market over the past three years that have looked to shake-up the rules governing the city.

Since 2020, the government has commissioned reviews of areas including the primary markets, fintech sector, secondary market and investment research industry.