A Shein float may not shine on the City
Another day, another sign that Wall Street is pulling away from sleepy old London, at least when it comes to the stock market.
Go-go US shares are at a premium (that means they’re expensive) and London shares are at a discount (that means they’re cheap).
Whether that makes you want to buy stock here or there depends on your investment mindset. Do you want to chase a trend higher, or pick up something that’s a bargain and wait for everyone else to catch up?
The second approach takes patience, but usually bares fruit in the end.
Meanwhile, the panicky notion that something must be done about our lack of stock market action continues.
Goldman Sachs is back making serious money and the CEO says we are in the “early innings of a capital markets and M&A recovery”. If he’s right, that will spread here, we may not need to use any artificial juicer to move it along.
The Financial Conduct Authority is trying to find grounds to give the green light for the £50 billion float of controversial Chinese fast fashion house Shein.
Shein is interested in a London float because of growing political tensions between the US and China.
But it doesn’t follow that this is a great opportunity for us. Reputational issues aside, if the Shein float is approved then turns out to be a flop, that does nothing to boost London’s standing.
Talking to bankers about this, even they are quick to note that the stock market and stock market floats are just one, highly visible, bit of what the City does.
Shares being up, floats being active, makes headlines, but not necessarily that much money.
With Shein and others it is far more important that the regulators and the City take a long-term view.
We do want companies to list here. But good ones. The flops just scare away investors for the next time, and we are none of us better off.