London Gains Ground as Europe’s Largest Stock Trading Centre
According to data compiled by the Chicago Board Options Exchange, London’s average daily value traded has reached $10.55 billion. London had lost ground over the previous four months when Amsterdam outshined the city in the stock trading.
In light of the latest data, while London is ahead of Amsterdam, the latter is however not that far behind at $10.41 billion.
London has reasserted control four months after it lost its first position to Amsterdam as Europe’s stock trading hub. Nonetheless, London is still far below the $16.9 billion it accumulated during the Brexit transit back in December 2020.
As 2020 came to an end so did Britain’s right to enter the EU single market. Ever since then the union hasn’t allowed investors within its boundaries to trade stocks in UK companies like BNP Paribas SA and Airbus SE. This is what largely caused a drop in the UK stock market and trade. While the EU might ultimately end up reopening access, at present there are no such signs from the Bloc’s side. For such a turn of events, it’s necessary that the EU recognizes the UK market as parallel or similar or interchangeable to its own.
However, this year London gained some volumes from equities on the Swiss stock exchange. This was after Switzerland lifted the ban back in February this year. However, Brussels had stopped EU investors from trading on Swiss exchanges. Either way, UK and Switzerland are not bound by such a ban since neither is a part of the bloc.
The bigger players in the stocks are unlikely to get impacted by shifts in trading volumes as they remain to obtain shares. Some big stock exchanges like London Stock Exchange Group Plc have ventured into the EU and London. This means that the company continues obtaining shares from both irrespective of the shifts or the location.
But the fact that London moved ahead of Amsterdam is a symbolic boost for the city. Interestingly it also happens to come around the same time that the UK Chancellor of the Exchequer streamlined for the UK financial industry. Chancellor of the Exchequer, Rishi Sunak to put forth a plan to uphold London’s position as the top financial epicenter post Brexit. The latest data is sure to give momentum to the latest strategy and the way forward.
Although the UK has been interested in maintaining close regulatory relations with Europe, according to Sunak it’s now looking to deepening ties with the US. The US is UK’s largest trading partner when it comes to financial services. Apart from the US, other economies that the UK awaits to liaison with include India, Brazil, and China.
It is also looking into stimulating more innovation in the financial technology sector while advancing green financing. The UK wants to become a pioneer in green finance that the rest of the countries around the globe can follow.