French political turmoil a lift for London as authorities in Paris teeters on brink

London should take advantage of the political turmoil in France to boost the stock market, a leading City figure has said.

Companies and investors could shy away from Paris as the French government teeters on the brink of collapse, according to Mark Austin, a partner at law firm Latham & Watkins.

And tensions between China and the US are making listings in Asia seem more unappealing, he added.

Austin, who is one of the experts behind recent City reforms, said crises abroad have inspired ‘a lot of enquiries’ about moving capital to London instead as it is now the ‘adult in the corner of the room’.

His remarks came as City watchdog the Financial Conduct Authority (FCA) appeared to pave the way for Chinese fast fashion retailer Shein’s controversial £50billion listing.

Investment company Pershing Square Holdings, meanwhile, ditched its Amsterdam listing yesterday. 

Turmoil: Companies and investors could shy away from Paris as the French government teeters on the brink of collapse, according to Mark Austin, a partner at law firm Latham & Watkins

That means it shares will solely trade in London where it is a member of the FTSE 100. Pershing cited improved liquidity in London as one of the reasons.

But Nikolay Storonsky, boss of online bank Revolut, said it was ‘just not rational’ to opt for London over a US listing.

There are hopes the tide is turning after the City has lost high-profile firms to overseas rivals in recent years. 

Austin, a member of the Capital Markets Industry Taskforce, a group of City figures led by London Stock Exchange chief Julia Hoggett, said he has seen interest in investment being moved out of Europe and towards the UK.

Speaking on the BBC’s Today programme, he said: ‘We are seeing a lot of enquiries from people who think “actually, is continental Europe a place where I would want to list a business right now?”’

Elections in France, Germany and Austria have given rise to instability while the reign of Right-wing leaders Geert Wilders in Netherlands and Giorgia Meloni in Italy have also set investors on edge.

And companies are growing wary of having ‘sole exposure’ to Asia, such as the Hong-Kong listed firm CK Infrastructure which made a secondary initial public offering (IPO) in London in August, Austin said. This happened two weeks after the City watchdog’s reforms were introduced in July.

‘There is a sense that the UK is starting to establish itself as an independent financial centre, well regulated, in a good time zone,’ Austin said.

There is a growing confidence that reforms to listing rules will continue to revive the UK’s status.

The FCA’s reforms came into force on July 29, creating a simplified regime that ended a distinction between standard and premium listings.

Before this, only companies with premium listings could join the FTSE 100 and FTSE 250 indices, so abolishing the distinction has cleared the way for more to do so.

In a memo last week, Austin said the City was set for success next year. He said: ‘The capital cycle is coming, and although IPOs are not going to come in the very near future – they are coming, and in numbers, in 2025 and 2026 onwards.’