There’s no two ways about it. For American investors, the U.K.
stock market hasn’t exactly been the place to be, with underperforming indices and a troubling dearth of new listings in the last few years. There are reasons for that, from lower liquidity to the country’s relative inability to scale tech companies. But it’s possible to take Britain-bashing too far, as some Wall Street bears are discovering.
According to information obtained by the Financial Times , some of the world’s biggest hedge funds have been caught off guard by sudden valuation increases in British stocks they bet would fail. Shorting involves borrowing a stock to sell in the market then buying it back before a deadline in the hope its value has fallen. In recent years, the U.
K. stock market has appeared to be a fertile hunting ground for short sellers. British stocks have lagged U.
S. peers, partly because the latter have benefited more from the recent AI boom. Shares in the S&P 500 have jumped close to 24% in the last 12 months, while the FTSE 100 is up just over 8%.
Commentators have also decried the London Stock Exchange for its lack of liquidity, with several major companies, including travel company Tui , delisting or avoiding IPOing in London and opting instead for other exchanges. Public listings have dropped 25% in the last 10 years, as exits have exceeded new flotations. Data from S&P Global Market Intelligence, viewed by the FT, shows some major U.
K. companies, including BT, Abrdn, and .
