The last 10 years have been pretty rough for UK stocks but there could be some signs of life emerging as we head towards 2025.

Brexit, Covid and other political and economic shocks as well as a tilt towards ‘old economy’ stocks and a minimal footprint in technology have combined to undermine the relevance and appeal of the UK market.

The resulting underperformance has led to people consistently pointing out the value on offer from London-listed shares relative to the rest of the world.

However, in the same way an optimistic football fan argues next year will be ‘their year’, a recovery never really seems to transpire: even in 2024, when the FTSE All-Share has made progress, albeit modest at 5.9%, it has fallen well short of the FTSE All-World’s 18.6%.  

But, as Ian Conway reports in this week’s magazine, November saw the first net inflow into UK-focused funds since April 2021.

The market badly needs institutions to start buying again to revive its fortunes so if this becomes a trend rather than a one-off it could be a genuine catalyst for a UK rebound.

Another key driver would be a stream of new market listings to refresh a list of constituents which has been thinned by delistings and inward M&A. Sabuhi Gard looks at recent addition Canal+ (CAN), the largest new addition for some time, and there is another big name which looks set to join in 2025 in the form of Chinese fast fashion play Shein.

While there are reservations about the IPO, it is nonetheless another decent-sized name to add to the UK market ranks.

We are still big believers that there are good opportunities to be found among London-listed shares and in time-honoured fashion you can read our best ideas for the year ahead in our main feature this week. Notably just one hails from beyond these shores. 

There’s plenty more to keep you satisfied over the festive period in this issue, including the thoughts of Terry Smith and other major fund managers on the stocks which surprised them this year and an exclusive interview by Martin Gamble with the founder of JD Wetherspoon (JDW), Tim Martin. We also look at how names from some of the most popular investment trust sectors performed.

Finally, a big thank you to all of our readers for your contributions and continued support in 2024. We hope you all have a Merry Christmas and Happy New Year and we’ll be back on 9 January 2025.

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