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CITY GOING CHEAP? MORE BOSSES JOIN COMPLAINTS THAT LONDON INVESTORS ARE UNDERVALUING FIRMS
CHEAP VALUATIONS!
KNOCKDOWN PRICES! BETTER VALUE THAN NEW YORK!
CHARLIE CONCHIE AND STAFF MORE LISTED company bosses have joined a growing chorus complaining London’s equity markets are undervaluing firms. The boss of polling giant YouGov, Stephan Shakespeare, said US markets were “better” at supporting companies like his while Plus500’s chief David Zruia said his retail platform would have a higher valuation on US exchanges. Both confirmed that they were pondering the possibility of a secondary listing in New York, following the lead of
gambling giant Flutter, but said no moves were planned in the short term. BT boss Philip Jansen, liberated after announcing his decision to step down, slammed London investors last month for failing to see value. UK investors “seem to have a focus more on the short term and find it harder to look at the longer term”, especially when compared to the US, he said. Earlier this year, SCM Direct, a wealth manager, said that London’s largest firms were trading at an around 18 per cent discount compared to their US peers.
“This anomaly ventures to suggest that if the UK companies were quoted in New York their valuation would probably be £460bn higher than it currently is. No wonder investors have become wary,” SCM Direct boss Alan Miller said. A number of theories have been put forward for London’s continued sluggishness, with Brexit often cited as a key moment. Others note that London’s IPO market was still buoyant as recently as 2021, when the UK had already voted to leave the EU even if the finer details were still being
worked out. Still others have criticised institutional investors and short-sellers for creating uncertainty in London’s investment market. The Treasury and the City regulator are working on reforms of listing rules and capital markets to boost the capital’s equity trading floors. A number of large pension funds have promised to put five per cent of their investable funds into the UK stock market in an effort to bolster valuations and reinvigorate a stagnant IPO market.
FREE WELL, THIS IS AWKWARD
Hoax OpenAI investment causes furore CHARLIE CONCHIE THE LONDON Stock Exchange was left red faced yesterday after a fake announcement popped up on its official channel purporting to reveal a $1bn investment into ChatGPT owner OpenAI. The fictitious press release appeared on the exchange’s news platform, where listed firms post regulated updates, falsely claiming that US private equity firm Ripplewood had made an investment into the West Coast AI outfit. City A.M. understands the announcement had been pulled onto the platform via one of the bourse’s partner organisations, EQS, and slipped through a vetting process. The announcement was pulled from the platform after the error was realised. “We were made aware of a potentially erroneous press release being displayed on the London Stock Exchange website and other news platforms,” an LSEG spokesperson told City A.M. in a statement. “The non-regulatory press release originated from one of our newswire partners.” Ripplewood has now called in lawyers to investigate the appearance of the release, the Evening Standard reported. Its CEO and founder Tim Collins told the newspaper: “This is illegal.”
Santander and Barclays join growing group of lenders cutting mortage rates LAURA MCGUIRE SANTANDER and Barclays have become the latest high street lenders to reduce the rates of their mortgage deals, following a stream of other cuts by fellow banks last week, offering some relief to buyers and re-fixers alike.
At Santander, an 85 per cent ‘loan to value’ deal is now priced at 6.09 per cent, down from 6.27 per cent. The reductions follow HSBC, Halifax and Nationwide slashing their rates last week. Nationwide slashed the price of its fixed rate mortgage deal by 0.55
percentage points. TSB also revealed reductions of 0.4 points on some of its deals. Rates spiralled alongside the Bank of England’s increases to the base rate. Inflation figures published tomorrow will likely lead to further rate reductions. Markets expect the
headline rate of inflation to fall to 6.7 per cent, down from 7.9 per cent last month. Rob Gill, managing director at mortgage broker Altura Mortgage Finance, told City A.M. last week that if this week’s data on inflation confirms a further fall then there could be a “mortgage price
war in September”. “Who saw this coming? It looks more and more like the bigger lenders are fighting for market position, a sure sign that they are well off their respective lending targets,” Ranald Mitchell, director at insurance and mortgage adviser Charwin Private Clients, said.
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