London is finding favour again from investors

Investors are cutting their exposure to American equites and returning to the previously unloved British market, according to the London Stock Exchange Group (LSEG), adding to evidence that President Trump’s unpredictable policies could benefit the City of London.
The chief executive of LSEG, David Schwimmer, said that flows had changed in recent months, reversing a trend that had left the London market out of favour for almost a decade as the Times reported.
While he had not attribute the moves to Trump’s policies, some fund management groups have said the turmoil caused by the president’s trade tariffs this year made investors rethink their big exposure to US equities.
The London stock market has suffered ever since the 2016 vote by the UK to leave the European Union and the subsequent political upheaval in Britain, which unnerved international investors. This triggered persistent outflows from UK equities, which in turn knocked valuations in the market, leaving London-listed companies vulnerable to takeover bids at bargain prices.
Investors piled into US assets, which outperformed compared with returns on offer elsewhere in the world and fuelled talk of American exceptionalism. Yet recent market volatility caused by the announcement of tariffs by Trump in April, which stunned investors and spurred a sharp fall in the US dollar, threatens to upend this thinking.
Richard Oldfield, the boss of Schroders, said investors wanted to see “resilience” in their portfolios and “that by definition, sees you moving away from a very US-oriented portfolio”. Jupitor Fund management, the British investment group, said shortly after Trump announced his trade policies that there was “early-stage evidence of asset owners and other investors looking to reallocate away from the US”. Schwimmer said: “We have seen a shift in flows over the past several months, I don’t know if I would ascribe that specifically to the geopolitics but there has been a growth in flows out of the US and into Europe and into the UK, in particular. And this follows, frankly many years of outflows coming out of the UK going back really to the Brexit vote”. He was speaking as LSEG posted better-than-expected first-half results which showed pre-tax profits in the six months to the end of June climbed by 43 per cent to £991 million, surpassing the roughly £750 million expected by analysts.
It announced it would return as much as £1 bilion to investors through a share buyback in the second half, on top of £500 million of repurchases in the first. Its interim dividend was raised by 14.6 per cent to 47p-a-share, which will hand back a further £247 million.
While best known as the owner of the London Stock Exchange, the group is a financial services conglomerate that Schwimmer has turned into a leading provider of financial data through its $27 billion takeover of Refinitiv in 2021. Its businesses include majority ownership of the clearing house LCH, the FTSE Russell indices and the Turquoise European trading platform.
The stock exchange has been dogged in recent years by worries of its shrinking and losing listings to other markets overseas. One way Schwimmer could try to bolster the competitiveness of the exchange is by introducing 24-hour trading, which he confirmed was under consideration. The current trading hours are 8 am to 4:30 pm.
“There are a host of issues that we would have to work through before going down a path like that relating to when companies would issue their news, or their results, to how to think about the technological updates”, he cautioned.
He rejected suggestions the London Exchange was doing less than New York to court private companies that are going public. “Our team spends a lot of time with companies that are preparing for listing. We don’t publicise that, we respect the confidentiality of those companies”.