How should investors respond to the stock market's dwindling status?

Duncan Lamont

Companies are abandoning the stock market in their droves, yet this is the main place where savers have put their money for long-term growth.

In 1996 there were over 2,700 companies on the main market of the London Stock Exchange. At the end of 2022 this had collapsed to 1,100 – a 60% reduction.

The figures look even worse when viewed over a longer time frame. There has been a near-75% fall in the number of UK-listed companies since the 1960s (see chart, below).

The stock market demise has been a global trend

Individual countries like to beat themselves up about their failings on this front – self-flagellation is a popular British pastime – but the reality is that it has been a global trend.

Europe’s downturn started later, but Germany has shed more than 40% of its public companies since 2007.

Even the US, often admired from afar, has experienced a 40% drop since 1996. This is even after allowing for the US boom in initial public offerings (IPOs) in 2021.

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