Holiday Inn boss says London stock market 'not attractive'

Head of InterContinental Hotels Group warns the UK capital's advantage is slipping away

London's share market is increasingly losing out on IPOs and primary listings to New York and European exchanges. Reuters

The chief executive of InterContinental Hotels Group (IHG) has claimed that London's stock market is a far cry from what it used to be and that officials need to get on the “front foot” if the City's attractiveness as a place to list company shares is not to fade away.

Keith Barr told the Financial Times that the UK stock market is “not a very attractive place” for listed companies to have their shares traded.

Although Mr Barr said that IHG, which owns the Holiday Inn and Crowne Plaza hotel chains, has no immediate plans to switch the company's primary listing to New York, he told the FT “that could change at some point in the future.”

Fourteen-year low

It has not been a great time for any of the world's major stock exchanges lately, with considerably fewer initial public offerings (IPOs) than in previous years.

However, London has fared much worse than its contemporaries in New York and Europe, with share listings plunging to a 14-year low.

Data from Bloomberg shows that just three small firms have listed in London so far this year, raising only about $14 million between them.

In New York, IPOs have fetched $3.5 billion, the lowest amount since 2016, while in Europe $2.15 billion has been raised through share listings, the least since 2020.

It has been a rough first quarter all round, with investors being put off by interest-rate increases and high inflation.

Britain's economic woes and perceived lack of liquidity are thought to be putting off potential listings.

“The UK equity market has typically been seen to lag in terms of valuations,” said Stephanie Niven, portfolio manager of global sustainable equities at Ninety One.

“That’s driven a bit of negative sentiment around UK listings.”

London's stock market was dealt a severe blow earlier this year when the British computer chip maker Arm said it would aim for a sole primary listing in New York.

Added to this, the building materials company CRH said last month that it plans to move its primary listing to New York from London, following similar moves firms by biotech firm Abcam, mining giant BHP Group and plumbing company Ferguson.

Some of the impetus to move away from London can be traced back to the UK’s vote to leave the EU in 2016, which Chancellor Jeremy Hunt has recently attempted to counter with the promise of regulation changes in the City of London.

A recent report by the City of London itself showed that rival financial centres such as Frankfurt and Paris had boosted their attractiveness at a faster pace than London.