Healey Urged to "Turbocharge" London Stock Market Amidst Takeover Frenzy

John Healey has been called upon to "turbocharge" the London stock market, which is currently experiencing a significant wave of takeovers totaling approximately £180 billion over the past three years. A report by City broker Peel Hunt highlights an "unprecedented pace" of merger and acquisition (M&A) activity involving UK-listed firms, raising concerns about the market's future vitality.

According to Charles Hall, head of research at Peel Hunt, 166 takeovers worth £180 billion have occurred since the beginning of 2023. Of these, £74 billion in deals have taken place this year alone, with a notable number involving foreign buyers. Companies such as airline Easyjet, warehouse giant Segro, Lloyd's of London insurer Beazley, finance house Schroders, and ingredients maker Tate & Lyle have been targeted.

In stark contrast, the number of new listings through initial public offerings (IPOs) has been significantly lower, with only 11 worth £6 billion since 2023. Compounding this issue, firms like Paddy Power owner Flutter and travel giant Tui have relocated their listings to rival exchanges in New York and Europe.

"To say that the UK has a problem retaining its companies and listing new ones would be a massive understatement," Hall stated. "The number and value of bids for UK companies is running at exceptionally high levels, raising concerns that the UK equity market is seeing a material depopulation."

While Hall acknowledged that the IPO pipeline is "looking more encouraging," with the recent £5.3 billion listing of payments firm Airtel Money marking the largest IPO in London in five years, he stressed the need for more substantial reforms. Hall, a proponent of measures to strengthen the UK stock market, advocated for incentives such as tax breaks on investments in British companies and for entrepreneurs listing firms domestically.

"The good news is that turbocharging UK equity markets is not difficult and can be done at pace," Hall said. "There are multiple levers that should deliver real results. Importantly, these should drive more tax revenue, accelerate economic growth, increase innovation and improve pensions and savings."

A key recommendation is the abolition of stamp duty on share trading. Hall argued that this move would "provide a strong economic return, as it would remove friction and enhance UK competitiveness." He pointed out the discrepancy where UK investors pay a 0.5 percent tax on London-listed stocks, while no such levy applies to overseas shares. London Stock Exchange boss Julia Hoggett has previously described the tax as "a pernicious tax" that "undermines the growth of the UK economy."

Hoggett has urged Healey to "take the handbrake off" UK listings by eliminating the levy and reintroducing tax incentives for domestic investing. Hall expressed optimism about the current IPO pipeline, anticipating increased activity in the latter half of 2026 and into 2027. However, he cautioned that the rate of M&A activity still significantly outpaces the number of new listings. He also noted a concern that many tech companies might opt to list in the US, a trend that, if continued, would see more UK companies listing in the US than in the UK this year, underscoring the urgency for fundamental changes to encourage domestic capital and listings.