Stock market is 'draining' money, warns Peel Hunt boss
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Broker Peel Hunt's boss has warned that money is 'draining out' of the London stock market and added that sentiment in the City was hit by the Budget. Chief executive Steven Fine hailed a pick up in dealmaking but he sounded the alarm over the lack of new listings in London.
He also noted that confidence had taken a hit, particularly on the junior market AIM, as a result of the tax raid announced by Chancellor Rachel Reeves last month. Peel Hunt, meanwhile, swung to a half-year profit fuelled by a surge in dealmaking sparked by multiple mergers and acquisitions (M&A).
The group posted a pre-tax profit of £1.2million for the six months to September, up from an £800,000 loss the previous year, while its revenues grew 26 per cent to £53.8million. But despite the uplift in profit, Fine warned that most of the activity driving the business was from M&A rather than new listings in London.
Concern: Peel Hunt chief executive Steven Fine. He noted that money had been flowing out of UK equity funds every month for the last three-and-a-half years, a situation he described as 'alarming.'. 'We are busy, but our pipeline is overwhelmingly focused on mergers and acquisitions.
'That means there's going to be more public companies going private or merging. And that means you'll end up losing more [listed] companies because they're just too cheap,' Fine told the Mail. He also said that while the market had shown signs of 'improving', this had 'slowed over the summer period' and investor sentiment had been hit in the last few weeks of September 'due to concerns around the UK Budget, particularly in relation to AIM'.
