London has overtaken Paris and is once again home to the largest stockmarket in Europe, a Bloomberg analysis has concluded.
And UK economist Julian Jessop has urged Remainers to take note, given they “made a big deal when the reverse happened”.
Bloomberg’s researchers found the combined market capitalisation of primary listings in London – excluding Exchange Traded Funds (ETFs) and American Depository Receipts (ADRs) – now amounts to £2382.47 billion, marginally more than Paris’s £2381.73 billion.
London was knocked off the top in November, extending an equity slump which stretched back to Britain’s decision to quit the European Union in 2016.
However, the market has outperformed recently due to rising oil prices.
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Writing on X, formerly Twitter, Mr Jessop, Economics Fellow at the free market think tank, the Institute of Economic Affairs, said: “FWIW, London has regained its ‘crown’ from Paris as Europe’s largest stockmarket…
“This is pretty meaningless (mainly about the types of companies quoted in the two centres), but that didn’t stop Remainers making a big deal when the reverse happened!”
Referring to accountancy firm Ernst and Young, Mr Jessop added: “Seriously, it makes far more sense to look at the performance of the UK in surveys of competitiveness (e.g. the Global Financial Centres Index), or attractiveness for investment (eg the EY surveys).
“No sign of a significant hit from #Brexit.”
Janet Mui, head of market analysis at RBC Brewin Dolphin, explained: “The UK has held up better due to its sector mix
“The energy sector is a low-duration play which can hedge against more interest rate or inflation-sensitive secular growth exposure.”
In contrast, Paris is under pressure from China’s economic slowdown.
LVMH, L’Oreal SA, Hermes International and Kering SA between them comprise nearly a fifth of the CAC 40 index, and all have slid from the highs hit earlier this year, with analysts warning demand for expensive handbags and jewellery is likely to slow in China, as well as at home in Europe.
As a result, more than £220 billion has been knocked off in market value in comparison with their peaks in April this year.
London’s problems are by behind it, with an economy “in the doldrums”, the Bloomberg report pointed out.
Tineke Frikkee, head of UK equity research at Waverton Investment Management, said: “We have seen some poor trading statements from UK mid-caps, suggesting destocking trends and delayed spending appear to be continuing longer than expected,”.
Nevertheless, with some signs of stabilisation in inflation, the Bank of England may now be able to “draw a line” under its rate-rise campaign, Bloomberg suggested.
