Yahoo Finance NatWest Sale Cash Should Go to UK Sovereign Fund, Peel Hunt Says
(Bloomberg) -- The UK government should use the proceeds from selling its £7.5 billion ($9.4 billion) share in NatWest Group Plc to set up a sovereign wealth fund to help revive the country’s ailing equity market, according to Charles Hall, head of research at Peel Hunt Ltd.
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“It could also be a cornerstone investor in IPOs to kick-start the market,” Hall said in a note to clients that draws on the findings of a recent research paper from London-based think tank Turning the Page. “In addition, there would likely be additional investment as other funds recognized the potential to turbo-charge the market.”
Once among the busiest equity markets in the world, the London Stock Exchange has suffered from a slump in trading volumes in recent years and a number of companies have picked other markets to list their shares. Paris overtook London as Europe’s largest stock market in 2022 and London is now the seventh-biggest globally, trailing the US, China, Japan, Hong Kong and India.
Why UK’s Once-Vibrant Stock Market Is In the Doldrums: QuickTake
The UK Treasury owns a stake in NatWest worth about £7.5 billion, according to data compiled by Bloomberg, and aims to offload the entire holding by 2026. Hall, a prominent advocate for UK stock market reform, suggested the proceeds could be allocated across managers of small- and mid-cap funds.
“This level of investment in the UK economy would make a considerable difference,” Hall said. “However, it could be considerably higher if other assets are injected into the sovereign wealth fund.”
Turning the Page was set up this year to develop policy ideas for rebuilding the UK’s capital markets. The organization is funded by Michael Tory, a founder of financial advisory firm Ondra Partners.
The opposition Labour Party has pledged to establish a national wealth fund to invest in green industries if it wins an election due before late January next year.
--With assistance from James Cone.
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