Younger retail investors should back the British stock market and buy shares in Natwest rather than just pumping cash into cryptocurrency, the City minister has told City A.M.’s new Bonds & Ballots podcast.
In an interview at the Treasury this week, Bim Afolami said the demand for digital assets showed an appetite for risk among investors but ministers and regulators needed to divert that towards the stock market.
“We haven’t lost the energy of wanting to own assets – we haven’t lost that, particularly younger people. [But] they haven’t seen the ‘traditional markets’ as somewhere where they can do that,” Afolami, told Bonds & Ballots.
“That’s one of the things that I want to change – to say, don’t just own crypto, own a share of NatWest, don’t just own crypto, invest with your savings through automatic enrollment, invest in Britain, the British stock market. That is the shift that we need to see.”
As part of plans to boost the culture of retail investment in the UK, the government is preparing to offload its remaining stake in the bank into the hands of the public this year. At the Autumn statement in November the Chancellor Jeremy Hunt said “it’s time to get Sid investing again” in reference to the state backed share-ownership campaign under Thatcher in the 80s.
Natwest was rescued by the government during the financial crisis in 2008 and the state has since been feeding shares back into the market. The government’s stake in the bank sits at around 37 per cent after two recent share sales.
In an interview with Bloomberg yesterday, Afolami said the retail offer for the remaining stake was “looking good” and he expects market conditions to be right this year.
The Natwest sale would help catalyse “animal spirits” in the wider market, he said.
The drive to get retail investors into the market comes amid a wider push to try and breathe life into the London market after a drop off in new listings and questions over the City’s health as a financial centre.
New IPOs cratered to a 13 year low last year as the the London Stock Exchange saw just 23 new firms listing on the market, a 49 per cent slide from the 45 registered in an already quiet 2022, EY found in its latest IPO Eye report.
