Letter: London market rebound needs more than one IPO

Much has been said of London’s stock market travails, with the potential initial public offering of Shein touted as a turning point in the City’s fortunes, after US-China political tensions derailed the planned New York listing of the fast-fashion company (“Shein edges closer to London IPO after filing confidential paperwork”, Report, June 25).

To be clear, UK policymakers have made real strides to reform the listing requirements that apply to companies in London. Proposed revisions relaxing the rules on dual-class stock and large transactions are welcome and will enable the listing of the sort of growth companies currently absent from the exchange. No doubt Shein will be paraded as validation of the reform agenda, but modernising the listing rules is only a part of the problem.

Growth company valuations are perceived to be far lower in London than New York, and no amount of regulatory reform will persuade companies to choose London under such circumstances. London needs joined-up thinking, combining regulatory reform with efforts to change the risk culture of investors on the exchange, and attract the domestic pension funds that have starkly shunned London over the last 30 years.

One swallow does not make a summer, particularly a swallow that has been so publicly jilted by its first true love, New York.

Professor Bobby V Reddy
Professor of Corporate Law and Governance
University of Cambridge, Cambridgeshire, UK