The London Stock Exchange is experiencing its most significant exodus of companies since the 2009 financial crisis, with mounting concerns that additional FTSE 100 enterprises will abandon the UK market for New York listings.
Data from the London Stock Exchange Group reveals that 88 companies have either delisted or transferred their primary listing from London’s main market this year, while only 18 new entrants have joined. This marks the largest net departure of companies from the main market in 14 years, with new listings poised to hit their lowest point in 15 years.
The £23 billion equipment rental giant Ashtead has become the latest major corporation to propose relocating its primary listing to New York. This follows the path of six other FTSE 100 groups that have departed the blue-chip index since 2020. The combined market value of these departing companies, including Ashtead, approached £280 billion as of Friday, representing roughly 14% of the FTSE 100’s total value.
Notable departures include the £39 billion gambling enterprise Flutter, owner of Paddy Power, and the £55 billion building materials group CRH, both of which have shifted their main listings to New York within the past 18 months. The exodus persists despite efforts by the UK government, regulators, and the LSE to enhance the City’s appeal through market rule reforms and domestic pension system modifications.
Companies cite several motivations for relocating to New York, including access to a broader investor base and improved share liquidity. The trend is particularly pronounced among businesses with significant North American operations. Ashtead generates 98% of its operating profit in the US, while plumbing specialist Ferguson derives 99% of its earnings from North American operations.
The FTSE 100, dominated by traditional sectors such as energy and mining, has achieved a modest 8% gain this year, significantly trailing behind the US benchmark S&P 500’s impressive 27% increase. This performance gap, coupled with the growing allure of American markets, suggests the exodus might continue into 2024, potentially reshaping the landscape of British financial markets.
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