London ends the year with world’s best-performing major stock market

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FTSE 100 is only top index to deliver a gain for investors in miserable year.

The Telegraph have reported the FTSE 100 was “the world’s best performing major stock index during a miserable 2022 for financial markets after oil titans and arms makers were boosted by the war in Ukraine.”

A report by Tom Rees and Riya Makwana states: “As tumbling global stock markets suffered their worst year since 2008 in a near 20pc plunge, London’s blue-chip index eked out a 0.9pc gain over 2022. It made the FTSE 100 the only major market to deliver investors positive total returns when also including dividends. The index finished the year at 7,451.74 points with total returns of 4.6pc.”

Rees and Makwana continue: “The FTSE 100 benefited from a falling pound, which boosts companies that earn money abroad and then turn it into British currency, as well as a strong performance by heavyweight energy and defence stocks including BP, Shell and BAE Systems.”

In fact British arms and aerospace giant BAE Systems came top of the FTSE 100 leaderboard after the invasion of Ukraine forced many countries to ramp up military spending. The defence contractor has gained more than 50 per cent this year.

“New awards across land, air and sea aided its order book, with management initiatives to improve operational efficiency assisting and a dividend yield of over three per cent not going unnoticed by investors,” said Keith Bowman, investment analyst at ii.

Meanwhile, Rees and Makwana explain rocketing energy prices boosted BP and Shell shares by more than third, lifting their combined value by around £60bn.

Commodities have also been a top performing asset this year returning 22pc over the year to the end of November, according to interactive investor.

Richard Hunter, head of markets at Interactive Investor, said: “Commodities being at the top of the pile in performance terms may surprise some. The oil price is ahead by just 5 per cent in the year to date (earlier in the year it was up around 50 per cent), while the prices of both gold and copper are down.

“One of the reasons for this has been the strength of the US dollar, in which commodities are priced, and which has an inverse relationship to commodity prices (a higher dollar can buy more of the commodity, so the price falls). 

“At the same time, Chinese demand for commodities – perceived and actual – has drastically reduced on the back of local Covid-19 outbreaks and subsequent restrictions, placing something of a stranglehold on the economy.”

Meanwhile the London Stock Exchange continues to be the world’s most international exchange, convening global capital for businesses and investors from around the world, providing the trading infrastructure that sits at the heart of it. 

The London Stock Exchange also continues to be the leading European venue, raising more equity capital than Amsterdam and Paris exchanges combined and with the market capitalisation of listed equities totalling £4.9trn.

While global market conditions have been impacted by economic and political factors, it is encouraging to see companies accessing London’s public markets. Throughout the year, 270 companies raised £12.8bn in follow-on capital to fund new projects and expansion alongside 44 inspiring issuers choosing to list on the London Stock Exchange, raising over £1.6bn.

London also remains Europe’s most active equity market and in 2022, welcoming more international companies than any other major exchange. The largest listing of the year came from China’s Mingyang Smart Energy Group, raising £592.4m through a GDR offering via Shanghai-London Stock Connect.

1 COMMENT

  1. This is brilliant news for the big business but what about the small businesses,fishing industry, farmers manufacturing industry Housing, illegal immigration the working people of this great country.l’ve voted for the Conservative Party all my life but not anymore you betrayed us.

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