Headline: London Stock Exchange suffering biggest exodus since financial crisis
Article: https://www.ft.com/content/aef053ce-c94d-4a72-8dce-bdbf56dd67e1
Summary (for those without a subscription):
- Significant Departures from the London Stock Exchange (LSEG):
• 88 companies delisted or transferred their primary listings from London in 2023, with only 18 new listings.
• This marks the largest net outflow since 2009 and the lowest number of new listings in 15 years.
- Reasons for Departures:
• Companies are increasingly moving to New York, citing:
• A deeper investor pool.
• Better liquidity.
• Growth of North American operations (e.g. Ashtead derives 98% of profits in the US).
• Perceived valuation discounts in London compared to the US.
• Limited domestic investor interest in UK-listed companies.
- High-Profile Defections:
• FTSE 100 companies such as Ashtead, Flutter, and CRH have moved their primary listings to New York.
• Collectively, these companies represented ~14% of the FTSE 100’s value.
- Impact on the UK Market:
• Analysts and executives warn the UK risks losing its status as a leading financial hub.
• The market is criticized for its focus on “old economy” sectors (e.g., energy and mining) and less appeal to high-growth businesses.
• Efforts to reform listing rules and pensions have yet to reverse the trend.
- Broader Concerns:
• Private equity buyouts and takeovers are further depleting London’s listed companies.
• Companies like Rio Tinto and British American Tobacco face investor pressure to relocate listings.
- Government and LSEG’s Response:
• UK officials and LSEG have tried implementing reforms and promoting London’s markets, but results remain limited.
• LSEG claims it remains the third-largest market globally for capital raised but acknowledges bespoke business needs influence listing decisions.