Jason Paltrowitz, director and EVP, corporate services, OTC Markets Group
From across the pond, we’re bullish 2025 could be a good year for UK equities. Firstly, with a new government and long-term fiscal policy, investors have greater clarity on the path ahead for the country. If they can successfully deliver the economic growth touted, we’re confident of a warmer reception by investors for UK equities.
Secondly, the relative value of UK equities provides additional upside should sentiment improve given their trend of undervaluation. US investors are always looking for value pockets, to which UK equites should be greater considered, particularly against their frothy US peers.
To achieve the rewards of such optimism, UK capital markets must continue evolving, and we expect London to still face challenges around perceived attractiveness. European and US exchanges will only continue to provide stiff competition, although we remain passionate believers in the potential of strong domestic markets.
The solution? Doubling down on efforts to make the UK an attractive investing hub, whether that be through listening to industry calls to scrap stamp duty reserve tax or better supporting the exchanges of Aquis and AIM to support small venture stage companies of tomorrow. These ideas alone would meaningfully improve attractiveness of UK equities further. Next year will bring no guarantees, and we’re expecting a few surprises along the way…
Adam Conn, head of trading, Baillie Gifford
I suspect this will be a year of index consolidation that will mask a further switch into high quality growth. I believe there will be a significant pick up in capital market activity, provided deals are priced realistically, leading to an increase in companies coming to the public markets through IPOs.
Brian Hyndman, chief executive officer, Blue Ocean Technologies
The growth of 24-hour trading in equities has been a long time coming and a market structure development that first made headlines over twenty years ago. At that time, progress was limited to extending traditional trading hours slightly to the pre- and post-market. Also, given a lack of market demand and market infrastructure, the hours were never extended past 8pm eastern time.
Three years ago, Blue Ocean Technologies set out to solve this trading access problem that grew more apparent following the pandemic, a time that also helped fuel trading after hours in the US due to the increase in retail brokers, mobile technology, and geopolitical events. The launch of Blue Ocean ATS provided a complete modernisation of antiquated market hours during a time when investors around the world wanted the convenience of trading during unconventional market hours and in the case of Asia-Pacific, during their day-time business hours. This fuelled the geographical expansion among global investors with connectivity to retail and institutional brokers benefitting US equities trading.
As trading volumes continue to grow and new records are set, a new competitive landscape is emerging with the recent launch of another alternative trading system, OTC Markets, that will roll out their 24-hour equities trading capability and the NYSE’s announcement of their plans to roll-out this new trading offering. The entrance of new competitors is a positive trend for the global trading demand of US stocks that will only benefit investors. As the first platform to enter this space, we are encouraged by the new momentum and welcome the healthy competition.
Sylvain Thieullent, chief executive officer, Horizon Trading Solutions
With a Trump presidency, it is fair to say that a lot of financial regulatory changes are completely up in the air. Right now though, the SEC has ratified changes to equity market structure including a move to reduce the tick sizes of trades. Smaller tick sizes would cause tighter spreads, which could have a knock-on impact on high frequency traders’ willingness to market-make US stocks while channeling large volumes of trading to technology firms like Robinhood.
This presents an opportunity for traditional retail brokers to win back the business that they have lost over the last decade if they are in a position to take advantage. They need to differentiate themselves and adapt to modern trading conditions. This means embracing technology, updating their internal operational processes, and ultimately creating the quality of experience that customers expect in 2025.