What price can you put on a good mood? Or how much could you charge once you’d bottled it? Any IRO who’s had to deal with the flow of negative emotion – whether from missing guidance, announcing an unpopular change or just facing turmoil in the wider macroeconomy – would surely like to call on positive feeling at the drop of the hat.
Speaking as a Brit, good moods seem particularly ethereal on our rainy little island. But after a week that has seen a new Labour-led government sworn in, UK GDP growth rising faster than predicted and some footballing heroics in Dortmund, Germany, everything seems a lot rosier. For most, it’s even been possible to look past the dampening effect of one of the wettest summers we’ve ever known.
It’s come at a good time for the UK capital markets, in particular. In an environment where new listings seem hard to come by, a renewed sense of optimism may just stimulate some constructive activity.
It was revealed this week that regulators have approved the most significant overhaul of rules for London-listed firms in three decades, in a bid to boost the London Stock Exchange’s competitive edge after money has flowed out to other financial centers.
Proposed rules from the UK regulator the Financial Conduct Authority (FCA) would give companies more flexibility to adopt dual-class share structures and allow venture-capital firms to give founders and other important figures stronger voting rights – long seen as an impediment to start-ups seeking a London float.
Crucially, they’ll also give bosses more power to make corporate decisions without a shareholder vote to back it up. For issuers, that may be good news; for activist shareholders and other engaged groups, it may not be.
Rachel Reeves, the new Chancellor in Sir Keir Starmer’s cabinet, said the rules represent ‘a significant first step towards reinvigorating our capital markets, bringing the UK in line with international counterparts and ensuring we attract the most innovative companies to list here’.
She will no doubt have one eye on the likes of betting company Flutter or building materials group CRH, who have moved their primary listings to the US in recent months, and the success of the NYSE in attracting high-growth start-ups. There are also the ongoing difficulties surrounding the expected London IPO of Chinese clothing firm Shein, which has attracted opposition from many quarters.
But the FCA’s changes, alongside the previous administration’s efforts to increase investment in UK assets by domestic pension funds and instil a culture of greater risk-taking with the so-called Edinburgh and Mansion House reforms, seem set to stimulate some real interest in London-listed firms.
It also is giving senior City figures what they have been pleading for: as Miles Celic, chief executive of lobbying group TheCityUK, asserts, what is needed is ‘policy certainty, stability and predictability’.
And, at a time when England’s men have made their first tournament final on foreign soil – come on, you didn’t think I was going to go a whole column without mentioning it, did you? – maybe our capital markets can start to enjoy some overseas success too. After all, optimism is contagious.
Laurie Havelock
Laurie has been part of the IR Magazine team for more than a decade, starting out as a reporter and research editor before becoming editor in 2023. He was previously acting business editor at the i newspaper and deputy business editor at The Daily...
