- Sorrell warns London’s decline
- Companies shifting to the U.S
- S4 Capital faces challenges
Sir Martin Sorrell has warned that the London Stock Exchange runs the risk of becoming a “backwater” if it fails to maintain the interest of leading corporations.
According to the chief executive officer of the advertising agency S4 Capital, the City has lost its allure as major firms avoid the market and others continue to seek a higher valuation across the Atlantic.
“London is becoming a backwater when fund managers are consulted,” Sir Martin (pictured) said.
“The market in London is becoming progressively less appealing due to concerns regarding liquidity and scale.”
Instead, businesses are relocating to the United States, notorious for its pricier goods and more streamlined procedures.
This year, the British chip designer Arm abandoned London for the United States, and both Smurfit Kappa and Irish construction products group CRH have relocated their primary listings to the United States.
But Sir Martin, 78, has stated that he has no plans to change S4’s London registration in the near future.
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It is of the utmost importance that we conduct our business properly,” he said. “American companies are held in higher regard for a reason: they are superior organisations with a more impressive track record.”
Transferring our classification to the United States would result in the loss of coverage. “You are a mere minnow in a vaster pond.”
However, the advertising magnate indicated that the United Kingdom had become “too complacent” and implored the government to improve London’s appeal to potential movers. Sir Martin’s capital-listed agency S4 has encountered difficulties due to clients reducing their advertising expenditures.
In November, the company issued a profit warning, and by 2023, its stock had declined by more than 70%.
But Sorrell is not the only one who appears to be growing increasingly disillusioned with the performance of London’s stock market.
As its American operations continue to flourish, Dublin-based wagering behemoth Flutter is preparing for a secondary listing in the United States this month. Tui and Pearson, meanwhile, have indicated they may relocate to Frankfurt and New York, respectively.
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