Value of Companies Trading on the London Stock Exchange Slumped by £860B in 2020

Even before the pandemic, the London Stock Exchange had witnessed the slowest year for fundraising activity in more than a decade, driven by concerns over a slowing global economic environment hit by US-China trade tensions, weak eurozone growth, and prolonged Brexit uncertainty.

However, the COVID-19 crisis brought a new hit to the companies trading in London, wiping out billions of pounds in their values.

According to data presented by Buy Shares, the combined market cap of all companies trading on the London Stock Exchange amounted to £3.06trn in October, an £860bn plunge since the beginning of the year.

Combined Market Cap Rose Only 2% After Stock Market Crash in March

The COVID-19 crisis hit the global stock market hard, wiping off billions in stock values amid extreme volatility and massive sell-offs in the first months of 2020.

However, while the world’s largest stock exchanges nearly recovered all the losses suffered during the coronavirus pandemic, the London Stock Exchange has witnessed a downsizing trend even in the third quarter of the year.

At the beginning of 2017, the combined market capitalization of all companies listed in London amounted to £4.58trn, revealed Statista and London Stock Exchange data. In the next twelve months, this figure dropped to £4.18trn.

New concerns over a slowing global economic environment hit by US-China trade tensions, weak eurozone growth, and prolonged Brexit uncertainty knocked equity raising on the London Stock Exchange in 2019. As a result, the value of all companies trading in London stood at £3.92trn in December last year.

However, this figure plunged by more than £900bn in the next three months, as the COVID-19 hit the global stock market.

Statistics show the following months brought a slight recovery, with the value of all companies listed in London rising to £3.26 in June, a 9% increase in three months.

The third quarter of the year again witnessed a negative trend with the figure falling by £201bn between June and October.

Number of Companies Listed in London Plunged Below 2,000

Statistics show the number of companies listed on the London Stock Exchange also fell considerably over the years.

In January 2015, there were 2,429 companies listed in London. In the next two years, this figure plunged to 2,261. The negative trend continued in the following months, with the figure decreasing to 2,022 in April 2018.

Statistics show the number of companies listed in London had been constantly falling for the last two and a half years, landing at 1,992 in October 2020.

Statista data also revealed that the average number of trades made on the London Stock Exchange dropped in the second half of the year, falling from 1.09 million in June to 907 thousand in September.