For financial services firms like Prudential, the London stock market is still world class, says ALEX BRUMMER

You hate to be a long-running record, but Prudential’s decision to maintain a presence at City and maintain a London entry after former chairman Paul Manduca oversaw the split seems to have shown great foresight.

It follows Standard Chartered and HSBC, Asian and Pacific financial giants, who, after once considering overseas listings, decided to stay in London despite the perceived drawbacks.

Prudential, for those who have forgotten, is the Far East and emerging markets arm of the most totemic brand in UK insurance. It lives on in the city as M&G, which manages the old £114 billion Pru fund.

De Pru was one of the first Western insurers to recognize the potential value of the Chinese market and, along with AIA (an offshoot of the American International Group), was a huge beneficiary of China’s opening up to foreign players.

However, all good things come to an end. The heavy hand of autocracy, along with the collapse of an overstretched real estate industry and fears of security breaches are currently casting a huge shadow.

Hong Kong’s independence and the post-colonial formula of one country, two systems are being seriously tested.

The latest company data from Prudential shows that Chinese buyers of insurance products are far more likely to invest through Hong Kong than on the mainland. New business revenue in Hong Kong soared, rising 218 percent to $670 million (£490 million).

In China itself, sales fell 16 percent to $171 million (£136 million), amid worsening prospects in Beijing after a few decades of massive production.

Chief executive Anil Wadhwani, an experienced Asia hand, acknowledges that the golden goose will not stay at its old pace.

He sets his sights on India, a tough market for overseas financial groups, and Africa, where Pru has long-established roots.

The target of a growth of 15 to 20 percent between 2022 and 2027 may seem too ambitious.

But the Pru has done it before. It is fashionable to denigrate Britain, but when it comes to financial services (even those without Hong Kong), British brands and London stock exchange listings still enjoy global status.

Safety first

It goes without saying that the best managers of the nation’s security should build maximum robustness into their systems.

The very idea that when a system so critical to the nation’s air safety, commerce and productivity breaks down, there is no reliable backup and operators must revert to analog data input is ludicrous. Why should we be surprised?

The ownership structure of National Air Traffic Services (Nats) should be a source of confidence.

After all, its major shareholders are Britain’s thriving air transport industry, the Airline Group, which includes most of Britain’s largest airlines, Nats staff, Heathrow and the government itself, with a whopping 49 percent stake.

Proponents of returning privatized utilities to public ownership might wonder why something so crucial to the country’s prosperity and security is underinvested.

You suspect that the disappointing regulator, the Civil Aviation Authority, has big questions to answer.

It’s also interesting to wonder what former BA boss Willie Walsh, head of the international aviation organization IATA, thought when he suggested that airlines should not bear the estimated £100 million in recovery costs.

After all, if Nats coughed up, it would be a matter of airlines (joint owners) paying for themselves! Imagine the catastrophe that would ensue if another critical system, the Airwave network, used by all UK emergency services, failed.

Private operator Motorola has invested nearly £800 million in systems and network investments since 2016, leading the National Audit Office to argue: ‘Airwave continues to perform well.’

The Home Office seems to think it’s a good idea to cut the Airwave budget and put BT in charge of the next-generation network. Good luck with that.

Lost Causes

The exodus of Britain’s most promising high-tech companies from listed markets continues, with life sciences software pioneer Instem Plc selling its soul to French private equity firm Archimed for £203m.

Once again, the business sacrificed to careless overseas ownership finds itself in the most promising space for Britain’s future – at the intersection of software and health science skills.

Shameful!