Ben Waters, Trader: Equity Trading in 2025 and Beyond

Ben Waters, trader, is a portfolio manager with extensive experience as an equity trader and value investor. Benjamin Waters, trader, has worked as an equity delta one trader since 2019 and is a graduate of the London School of Economics and Political Science. This article will look at equity trading in 2025, sharing expert predictions for the future of capital markets.

PWC’s Capital Markets in 2025 report explores changing dynamics in initial public offering (IPO) activity globally. The report suggests that, over the course of the past decade, there has been a marked increase in cross border capital market transactions, particularly those involving IPOs. PWC’s report also suggests that growth of emerging economies continues to impact the global landscape of capital market transactions. As companies seek to go public, the report speculates that they will have more choice than ever before in terms of securing investment from overseas.

In emerging nations, a lack of appropriate local regulatory infrastructure and domestic capital pools seem likely to continue to thwart access to capital for scaling companies. PWC predicts that firms will continue to rely on overseas investors to help them grow, primarily relying on the three global financial centres of London, New York and Hong Kong. However, PWC expects Asia to become an increasingly alluring capital source, eventually challenging developed marketplaces. As stock exchanges and capital markets in developing countries grow more sophisticated, experts predict that companies based in Western nations will increasingly look to these markets with the aim of tapping into their growing wealth.

It is no secret that global growth is shifting eastward. As far back as 2011, the UN’s World Economic Situation and Prospect report suggested strikingly different outlooks for developing Eastern countries, where growth remained strong, compared with developed nations in the West, where growth had already begun to stagnate. These diverging economic expectations are predicted to have a profound impact on the development of equity capital markets.

The rise of emerging stock markets as sophisticated financial centres in their own right is challenging the dominance of traditional financial centres like London and New York. According to the UN’s World Economic Situation and Prospect report, 55% of respondents believed that, by 2025, Shanghai would be the most attractive venue for foreign listings. This was in spite of the fact that, in 2011, the exchange did not yet allow foreign investments or listings.

Despite rising tides for other financial centres, in the United States the bull market continues to reign supreme for now at least, having hit new heights through the first half of 2024. As the year progressed, the bull market built on the same layers of support that had pepped up stocks all year. Although risks remain, reasons for the hopeful mood of experts in the United States include a resilient economy, with corporate earnings resting comfortably. Indeed, forecasts from Wall Street suggest steady earnings growth through to at least 2026.

Favourable investment themes in the United States include fuel stocks and, of course, AI. On the Wednesday before the 4^th of July holiday in 2024, the S&P 500 finished a half-day session at an all-time closing high of 5537, up by an impressive 16%. Although that falls some way behind Nasdaq’s record 21.1% gain, it is still well ahead of the Dow Jones’s 4.3% industrial average.

The investment landscape is evolving faster than at any point in history, with technological advances enabling investors to construct portfolios in innovative new ways, aligning their investments with constantly shifting preferences and priorities. Trading themes predicted to feature prominently in 2025 and beyond include AI and the rise of robo advisors, FinanceGPT, quant funds run solely by numerical data and software models, and the adoption of ESG by the financial world and everyone operating within it as an essential investment strategy.