Hundreds of companies could leave the London Stock Exchange over the next four years as large buyers take advantage of low business valuations, a City broker has warned.

Peel Hunt raised concerns about the “relentless” pace of companies leaving markets as shareholders are also keen to agree to offers amid relatively weak performance by UK markets.

The number of listed companies on the FTSE Smallcap index - made up of companies outside the FTSE 350 - has reduced in recent years.

Excluding investment trusts, the number of business has fallen from 160 at the end of 2018 to 114 at the end of last year.

Peel Hunt warned that if the current trend continues, the last company will leave the FTSE Smallcap Index in 2028.

This would also happen if investment trusts are included but at a slower rate.

Peel Hunt’s head of research Charles Hall said: “The pace of de-equitisation is relentless and will inevitably continue given the low valuation accorded to UK companies.

He said the Smallcap Index could be saved with increased demand for UK equities which would boost valuations and make listing by other companies “a more attractive option”.

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