London Stock Exchange reportedly accelerates 24-hour trading plan

CGTN Europe

CGTN Europe spoke to Justin Urquhart-Stewart, Investment manager and business commentator.

Transcript

00:00Shares in UK-listed companies could soon be traded 24 hours a day.

00:05The London Stock Exchange is reportedly accelerating a plan for round-the-clock trading

00:10to boost the appeal of the UK market and attract younger investors.

00:15Well, Justin Urquhart-Stewart is an investment manager and business commentator,

00:19and he joins us now live in the studio. Justin, thank you very much for coming in.

00:22My pleasure. I'm a very young investor, I'm afraid.

00:25None of us are very young on this show.

00:26Now, it's worth saying, isn't it, that the LSE Group hasn't confirmed these reports?

00:31No, no, no.

00:32But 24-hour trading, is this the way you think we should be going?

00:36No, it's going to happen anyway.

00:37And frankly, London should have been doing it before,

00:39because when London was the most international market in the world,

00:42not to say that it was the largest at all,

00:44but it had many more different countries actually operating through London,

00:49it could, in effect, operate 24 hours a day if they decided to automate themselves.

00:53They did go through Big Bang, which meant they didn't have us back in 1986,

00:56they didn't have to have a trading floor anymore.

01:00The Americans quite correctly actually identified they had the trading floor in Wall Street,

01:04but that's theatre.

01:05That's made it look like the stock market.

01:08You don't expect silly Gits and red braces merely for show.

01:12What you actually need, actually, is decent technology allowing you to trade.

01:16And of course, actually, you look at Bitcoin, or the cryptos, and currencies,

01:20they can all trade 24 hours if you want to.

01:22And bear in mind, most trading doesn't involve humans anymore.

01:26We're now dealing with automated, automated trades.

01:28So if London don't do it, they should be left out.

01:30What London needs to do is, what future does it have?

01:33Because currently, its owner, only about 15% of its revenue comes from trading equities.

01:38The rest, it's all about data.

01:40So what I'd love to see is London actually linking together with ASEAN nations,

01:44but also with Beijing as well.

01:46Hong Kong and Shanghai link those markets, and you'll have much more demand,

01:49a greater depth of liquidity, and much more international trading.

01:52And that will actually then fulfill the prime purpose of the stock exchange,

01:56which is to raise capital to grow businesses anywhere around the world.

02:00Make that simpler and cheaply and run it effectively.

02:03There's your future.

02:04We're going to talk about AstraZeneca in a moment,

02:07but the CEO recently suggested that this UK company should actually move off

02:13the London stock exchange, and he's not the first one.

02:15We've seen a lot of delisting.

02:17What is going wrong?

02:18Well, what's happened is, you've actually seen companies looking at London exchange

02:21and saying, well, if my business is actually not all in London, do I need to be here?

02:24And it's not necessarily the cheapest market in the world.

02:27It's not the most liquid, deep market in the world.

02:29And since Brexit hasn't had necessarily the pull of your seeing throughout the rest of Europe,

02:34so London hasn't really found its new position.

02:37What should it be trying to do?

02:38And therefore, what it should be trying to do is actually market itself to businesses,

02:43probably slightly smaller scale businesses,

02:45very to attract those in internationally.

02:47Those who don't want to be in America.

02:48Why don't they want to be in America?

02:50Well, prior to Trump and regulatory issues and tariffs and things like that,

02:53they don't want all the regulation that goes with American operations,

02:56whereas London will be much a lighter touch to it.

02:59It's still regulated, but a lighter touch.

03:00But when you go to America, you have to have very strict rules,

03:03and the Russians found this because they found they want to try and float some of their companies in America,

03:07whereupon there were threats that some of their directors would go straight to prison.

03:10So you've got to be careful.

03:12Now, AstraZeneca, as you were talking about there,

03:14it's invested $50 million into a US operation, hasn't it?

03:19Yeah.

03:19President Trump this morning must be waking up in America extremely pleased by that,

03:24because he's been saying all along that's the purpose of tariffs.

03:27The purpose is to get overseas companies to invest in America,

03:30to move their operations to America.

03:32So he must be very pleased.

03:34A sign that tariffs are working, David?

03:37Well, the trouble is he's a rather strange character,

03:41because he's looking at one end of a tariff.

03:42It's all very well actually saying, well, what a tariff of goods coming in.

03:44What do the competition do?

03:46What do the other countries do?

03:47And the answer is, well, they'll react the same.

03:49Tariffs can actually, you don't know, not be a break on an economy.

03:53Mind you, it can also break an economy.

03:55And so you've actually got to make sure it's the right level.

03:57So the issue he's forced countries to do is to, let's do a deal.

04:00You know, I always love to think he's a great deal maker.

04:02Questionable.

04:03But nonetheless, that's his own brand.

04:06And so people like Britain have gone along sometimes,

04:10sort of kowtowing in many ways towards him,

04:12say, please, can we do a deal?

04:14And others not.

04:15What it has done with, let's say, operations like NATO and other areas,

04:20where people have lived off the support of the American economy

04:22and the American budgets,

04:24now actually say, well, you're going to have to look after yourselves now.

04:27And so Europe's going to have to spend much more time now saying,

04:29right, we've got to operate independently.

04:31We're still allies.

04:32We've still got our own world.

04:32We're still trade.

04:33But actually, the imbalances have to change.

04:35And I've been a great critic of Trump.

04:37But actually, in some of these areas, he's not wrong.

04:40The problem that he hasn't worked out is,

04:41tariff charges one way will come back and hit you the other way.

04:45But he hasn't had that week yet.

04:46We are days away from the latest Trump deadline, 1st of August.

04:51He says there's no extension after this.

04:53What is the mood on the markets with business, with investors at the moment?

04:57What they'll think is, the fact he says it's two weeks,

05:00a bit like stopping a war with 24 hours.

05:02These dates are fairly fungible.

05:05And so basically what the markets have actually quite liked

05:07is whatever they think of the individual concern,

05:10he's actually been making the economy much more dynamic.

05:13And what he's done is actually broken some of the complacency,

05:16which we've had since, well, frankly, the end of the Second World War,

05:19to actually have, not to say a new order,

05:21but a new dynamic to actually say that actually how you grow businesses internationally

05:25should not be the same as before,

05:27and America is not going to be supporting you,

05:29particularly Europe and other areas.

05:31But, you know, remember, we're in a low, slower world of growth.

05:35Remember, the one thing we should hang on to,

05:36which is actually vital for both China and America,

05:39is they need each other.

05:40They're in a symbiotic relationship with each other.

05:42Who's the largest trading partner for China?

05:45America.

05:46Who's the largest owner of American debt most of the time?

05:48It's China.

05:49So they may mold each other, but they need each other,

05:52and they'll do a deal.

05:54Yeah, it was interesting what Scott Besson has just been saying,

05:56that they're in a good place, the two countries,

05:58so we await further developments.

06:00Thank you so much for your time.

06:01Justin Urquhart-Stewart, business investor and commentator.

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