The outperformance of US markets has been one striking feature of the pandemic. That’s directly linked to the eye-watering rises in valuations and revenues of big tech as investors and new customers flocked to these companies when the world was forced to stay at home. It’s just over a year since Apple’s galloping value eclipsed the worth of the whole of the FTSE 100 and it has kept pace since then with the tech stock and the index both now valued at around $2.7tn. But the seeds of this US success were sown long before then.
In contrast, since the Brexit referendum the UK market has been having a rather miserable time of it: underperforming US and EU equities, stalked by predators, full of yesterday’s old-world success stories and largely a tech-free zone. There’s also the unsettling suspicion that it’s all built on a destructive dividend culture, as recently highlighted by hedge fund manager Paul Marshall, which prevents companies from investing in their own future. If the US represents the world’s exciting tech future, it seems the UK has lost its way.
Since 2016 the S&P has delivered gains of 140 per cent, the FTSE 100 less than 40 per cent while the number of listed companies in the UK has fallen by about 40 per cent from its peak in 2008 and London failed to secure more than 5 per cent of IPOs globally between 2015 and 2020.