In an effort to revitalize the struggling UK stock market, Lord Mayor Alastair King is spearheading a new initiative that aims to encourage Britain’s major pension funds to increase investments in UK-listed companies. This bold move comes on the heels of a groundbreaking compact signed by top investors last year, including industry giants like Aviva, Legal & General, and Scottish Widows. These pension providers had vowed to allocate 5% of their default pension funds, totaling up to £50 billion, to unlisted equities by 2030 in an effort to boost returns for savers and bolster funding for crucial sectors like infrastructure.
Here are some key points surrounding this new development to ramp up investments in the UK stock market:
- Only 8% of funds in UK defined contribution pensions are currently invested in UK equities.
- British pensions invest significantly less in domestic equities compared to other markets like Italy and Australia.
- Despite the UK’s reliable regulatory system and rule of law, London’s stock market has been underperforming due to major companies shifting their primary listings overseas.
Lord Mayor King, who has a background in asset management and corporate law, is determined to address these challenges head-on. He recognizes the need to capitalize on the UK’s strengths while acknowledging the shortcomings in its stock market performance. King believes that by encouraging more investment in UK-listed companies, London can reverse the trend of companies seeking overseas listings and strengthen its position in the global financial landscape.
As the figurehead of the City of London Corporation, Lord Mayor King plans to unveil more details about this initiative at the upcoming Mansion House dinner. He aims to collaborate with key stakeholders in the financial industry and the government to drive positive change. King’s vision includes advocating for the removal of stamp duty on trading in UK shares, which he views as a hindrance to investing in the UK public markets.
Ultimately, Lord Mayor King’s push for increased investments in UK-listed companies reflects a broader effort to revitalize London’s stock market, attract investors, and foster a culture of risk-taking in the financial sector. His leadership and dedication to the Square Mile signal a new era of transformation and growth for the UK financial landscape.
