What the London Stock Exchange really trades

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Katie Martin (0:39)

So in the UK, politicians, bankers, all kinds of people are all fretting about one thing, which is the long, slow, painful death of stock market listings in London. But when one company left London earlier this year, we asked the chief executive of the London Stock Exchange group what he thought, and he said, and I quote, that sort of is what it is. What is up with that? Let's find out.

This is Unhedged, the markets and finance podcast from the Financial Times and Pushkin. I'm Katie Martin, and this is a very special British Unhedged podcast today because the Americans are all off eating.

I'm joined by Nikou Asgari, who is my desk buddy. We are growing some bonsai together.

Put them in the fridge. But when we're not growing bonsai, we're talking about things like the London Stock Exchange group. Welcome to the Unhedged podcast, Nikou. What is going on here? Whenever you are out and about in London now, there are these very strange advertising slogans in train stations and on top of like cabs saying, others do some of what we do, but not everything we do. So catchy. It's a really catchy catchphrase. It's the slogan for the London Stock Exchange group. Tell me, Nikou, because I know you've been writing about this recently. What are they talking about?

Nikou Asgari (1:55)

Yes, they have this very weird promotional campaign. And one of the videos, the start of it is, in finance, names can be a bit misleading. Take ours, for instance, which is like such terrible branding. It's just saying our name is bad.

Katie Martin (2:09)

Yes, you might be confused about our name.

There's a good reason for that. Yeah, they're very much banging the drum that we're not just about London and we're not just about the stock market. But politicians in the UK really care about getting the stock market rolling again, getting lots of listings, making sure that we hold on to the companies that were already listed here. Why? Why is this such a big deal? Is it just a kind of, you know, bragging rights thing?

Nikou Asgari (2:33)

I mean, partly. But I think part of it is to do with the culture of finance and in growing new companies and having that culture in the UK and saying, hey, we can grow new companies, we can list new companies.

The founders make money, shareholders who invest in them, whether it's a pension fund, whether it's a retail trader, they can make money and just cultivating this environment in a way that perhaps doesn't exist at the moment because these companies are just going to New York.

Katie Martin (2:56)

I mean, that's what people say about the UK, isn't it? There's a really vibrant market for venture capital. If you're a startup, then there are some specialist investors out there that will back you and get you up and running. But as soon as you want money in size, you want to list on a stock market, British investors are very cautious. They don't like taking a ponton thing. It's a cultural thing. It's like what I always come back to when I'm thinking about how we are two countries divided by a common language in terms of the US and the UK is that in the US, when everyone got their stimulus checks in COVID, it was like, here's some money to tide you over while you can't work.

Yeah, what did Americans do? They punted it on stocks. What is wrong with you people? If you gave Brits a ton of cash and said, here you are, do what you will, just stick it in your savings account. We would go to the pub.

Or we put it in savings. We don't put it in stocks. And that means that there's just less money sloshing around helping companies to grow, unless they're pubs.

It's all about the ecosystem. And so having the stock market onside in terms of being a really important part of that ecosystem, I guess, really matters. So to the extent to which the LSE has gone down a different route, and it's looking for data as a business, and it reckons that's the kind of shining beacon on the hill, is it working or is it just losing money hand over fist?