The London Stock Exchange is facing its worst year for departures since the financial crisis. A total of 88 companies have delisted or transferred their primary listing from London’s main market this year. Only 18 have taken their place.
This marks the biggest net outflow of companies from the main market since 2009. The number of new listings is also on course to be the lowest in 15 years. Initial public offerings remain scarce and bidders are targeting London-listed groups.
Ashtead, the equipment rental company with a £23bn market valuation, recently proposed moving its primary listing from London to New York. It would join six other FTSE 100 groups that have shifted their primary listings overseas since 2020. These movers had a combined market valuation close to £280bn — about 14 per cent of the current total value of the FTSE 100.
Among these defectors are £39bn gambling giant Flutter and £55bn building materials group CRH. Both have moved their main listing to New York in the past 18 months. A series of takeovers by private equity bidders has also depleted the exchange.
“We cannot be taken seriously as a global leader in finance if we do not have a thriving equity capital market,” said Charles Hall, head of research at stockbroker Peel Hunt. “The UK market does not have any god-given right to be a leading listing venue, but it requires nurturing and support to be successful in a market that is increasingly global,” he added. He warned that more companies will depart unless action is taken.
Companies moving their main listing to New York have cited a deeper pool of investors and better liquidity prospects. For some, the move reflects the growth of their North American operations. Ashtead makes 98 per cent of its operating profit in the US.
London listings face significant outflow
Plumbing group Ferguson, which moved in 2022, derives 99 per cent. According to Bank of America, nine companies in the FTSE 100 garner more than half of their revenue from the US.
This includes data group Experian and education company Pearson. Research last year identified London as the European stock exchange most at risk of suffering departures to the US. The analysis ranked companies based on their valuation discount compared with US peers, their revenue share generated in the US, and the proportion of North American investors on their register.
Among the 18 large London-listed groups identified as flight risks were Rio Tinto and British American Tobacco. Investors have pressured both companies to move their primary listings to Australia and the US, respectively. Goldman Sachs noted on Friday that the UK’s valuation gap to the US has become larger.
The FTSE 100, oriented towards sectors such as energy and mining, has gained nearly 8 per cent this year. In contrast, the US benchmark S&P 500, home to higher-growth stocks such as tech giants, has generated roughly 27 per cent over the same period. French pay-TV operator Canal+ could be valued at more than €6bn after it lists in London on Monday.
This would make it the largest primary listing in London since Haleon was spun out of GSK in 2022. However, a senior banker in London expects more listings to transfer to the US next year, particularly among fast-growing businesses. “The US is now such a big capital market relative to anywhere else that people feel they’re going to get a better deal in the US,” he said.
Sharon Bell, a European equity strategist at Goldman Sachs, remarked that many businesses searching for higher valuations feel forced away from the UK due to a lack of domestic investor interest. Recent reforms — including planned changes to the pensions system and revisions to UK listing rules — have not yet shown significant impact. Chancellor Rachel Reeves recently called the Canal+ listing “a vote of confidence in the UK’s capital markets,” highlighting the government’s efforts to ensure market stability and reform.
Nevertheless, one FTSE 250 executive emphasized that more needs to be done to entice investors, suggesting that it is not high enough on the government’s priority list.
