IR Monitor – 6 August 2025

In this week’s newsletter:

• Investors fleeing US equities boost unloved London market – The Times reports on the reversing trend as investors relocate from Trumpland
• Hedge fund exposes risks in UK Listing Reforms: Reuters BreakingViews illustrates the downsides of the new approach
• Saudi stocks losing their sparkle – market slide signals doubts over kingdom’s diversification plans discusses the Financial Times
• Retail investors drawn away from AI to defence sector as geopolitical tension heightens according to City AM
• Raconteur on Takeaway Lessons from Beijing
• And finally…Bloomberg explains why UK CEOs are more downbeat about the economy than during lockdown

This week’s news

Investors fleeing US equities boost unloved London market

The London market has moved back onto the radar of international investors, says The Times. The London Stock Exchange Group (LSEG) confirmed the switch, and some fund management groups have hinted that American tariffs may be the cause for investors rethinking their reliance on U.S. equities. Investors seek stability in their portfolios, and the LSEG has reiterated their efforts to persuade private companies to list in London, reform their systems to retain London as a desirable market for investors and maximise the LSEG’s broad scale exchange. 

Downsides of UK Listing Reforms

The LSEG’s major listing reforms have not yet triggered an inbound of vibrant new companies into London’s public market, and Reuters thinks Dan Loeb might be the first instance of bending the rules. Third Point Investors is keen to merge with Malibu Life Reinsurance, based in Cayman Islands. Under new listing rules, Loeb is able to vote on the deal even though he sits on both sides of it, leaving independent shareholders without true autonomy to decide if the deal is best for the firm. Investors are questioning whether the new rules truly provide adequate protection.  

Saudi stocks losing their sparkle – Financial Times

Following a strong performance, Saudi’s IPO market has lost its sparkle during 2025, according to the Financial Times  –  with average first-month returns of new primary listings dropping to just 4%, down from 27% last year. This poor performance is accredited to falling oil prices, tighter liquidity and a slowdown in government spending. Analysts warn rising borrowing might pressure funding costs and deter investor motivation. Their foreign reserves remain strong, but this shift in momentum might have investors reassessing their capital allocation in the region.  

Away from AI, retail investors drawn to the defence sector – City AM

New research from online investing and trading platform IG has revealed that over 50% of retail investors out of 1,800 investors surveyed believe that the defence sector will see the strongest growth in the next six months, while AI has fallen to second place with 45% by comparison. Investor confidence in AI has seen the sector fall out of favour, according to City AM. The sector has been shaken by factors such as Trump’s tariffs, which exposed the sector’s “fragile resilience on international supply chains”, vulnerabilities in AI’s Asia-centric supply chains as well as growing competition from China. Defence spending commitments from NATO members have increased in 2025, leading to a spike of capital inflows into the global defence industry and driving strong gains in defence stocks like BAE Systems and Babcock.

Takeaway lessons from Beijing

The Beijing Stock Exchange (BSE) is now experiencing rapid growth, with more IPO applications in 2025 than both the Shanghai and Shenzhen exchanges combined. Its success is driven by looser listing requirements, strong support for small and medium-sized enterprises (SMEs), and growing investor interest in local tech startups. In contrast, the London Stock Exchange has seen only nine listings this year. Some of the lessons that the UK could learn from the BSE’s rise, as identified by Raconteur, includes providing stronger support for SMEs, improving accessibility through relaxed IPO requirements, encouraging a more diverse range of industries to list as well as promoting retail investing through education and digital platforms. It also emphasises the importance of fostering regional growth outside of just London and how to take advantage of volatile markets and global uncertainty in order to position the UK as a more attractive listing destination. 

And finally… Bloomberg explains why UK CEOs are more downbeat about the economy than during lockdown

Business confidence in the UK has fallen to its lowest level since records began in 2016, according to the Institute of Directors (IoD) cites Bloomberg. The IoD’s economic confidence index dropped to -72 in July, a reading that is lower than the recorded -69 during the 2020 Covid lockdown. Executives cite rising business taxes, slow policy impact and economic uncertainty under Labour as key concerns. About 85% of the nearly 900 business leaders surveyed believe the government will fail to revive growth, with two-thirds rating its policies as “very unsuccessful”. Business leaders are also less optimistic about their own companies, with falling confidence, revised investment intentions, and lower expectations for revenue and hiring. The IoD is calling on the government to rule out further tax increases, speed up planning reforms and reduce regulation to restore business confidence.