Online betting giant Flutter, the owner of Paddy Power, is considering switching its main listing from London to New York, delivering another blow to London's struggling stock market. Flutter, based in Dublin, currently has its main listing on the London Stock Exchange but launched a secondary US listing on the New York Stock Exchange. The proposal to switch the primary listing to New York will be put to shareholders at the next annual general meeting on May 1. Flutter's sales in the United States surged 38% last year, compared to a 24% increase across the group [3125eb79].
This decision by Flutter to quit the FTSE 100 is another setback for London's stock market. The company's move follows a trend of European companies, including UK tech firms, opting to list on US exchanges like the NASDAQ and the New York Stock Exchange. The allure of higher valuations, access to larger markets, and the US government's focus on green and sustainable projects have been cited as reasons for this shift. London is facing increasing competition from other financial centers, and Flutter's decision is seen as a sign of the declining attractiveness of London as a financial hub. The London Stock Exchange is expected to fall short of the $1bn mark for money raised for companies floating on it for the first time since 1995. UK investors are relatively more risk-averse than their American counterparts, and the perception is that international firms receive higher valuations when selling their shares on US stock exchanges [157c5b0f].
Despite these challenges, Nasdaq, the US stock exchange, continues to actively pursue UK companies to list in the US. Karen Snow, the global head of listings at Nasdaq, believes that more British companies are opting to list in New York rather than the UK. She stated that this trend is due to the ability to attract larger levels of investment in New York. In 2023, the Nasdaq raised $13bn from 125 listings, while 23 companies listed in London, raising $1.2bn. Snow mentioned that Nasdaq is having a lot of conversations with UK companies about listing in the US. She highlighted the access to liquidity, valuation, brand alignment, and association with innovation and growth as reasons for this trend [157c5b0f].
PrimaryBid, a tech platform for armchair investors, is planning to stop taking orders directly from UK retail investors and focus on expanding in the US and Europe. The platform, which allows ordinary people to buy shares when companies list, has been hailed as a radical force in the London stock market since its launch in 2016. However, most orders now come through platforms like Hargreaves Lansdown, making the costs associated with going directly to customers no longer justified. PrimaryBid is planning a significant overseas expansion in France and the United States [6dd1f545].
TP ICAP, the world's largest interdealer broker, is considering listing its data and analytics arm, which could be valued at around $1bn, on the New York Stock Exchange. This move comes as TP ICAP looks to diversify its revenue streams amid increasing competition in the interdealer broking sector. TP ICAP's data and analytics arm provides real-time pricing, reference data, and analytics to financial market participants. The potential listing in New York would allow TP ICAP to tap into a larger pool of investors and potentially increase the valuation of its data arm [16cc5a60].
The common theme across these inputs is the shift of European companies from their home exchanges to US exchanges. This trend is driven by the allure of higher valuations, access to larger markets, and the US government's focus on green and sustainable projects. UK tech companies, in particular, see a listing on the NASDAQ as an opportunity for future investments. However, there are downside risks, such as the US Federal Reserve's monetary tightening policy and potential conflicts in the Middle East. This shift poses a challenge for European exchanges, especially post-Brexit, as they try to convince companies to stay. London, in particular, is facing increasing competition from other financial centers, and Flutter's decision to list in the US is seen as a sign of the declining attractiveness of London as a financial hub. Nasdaq's efforts to attract UK firms to list in the US are expected to continue, with other UK tech firms likely to follow Arm's lead and list on Nasdaq. The London Stock Exchange is expected to fall short of the $1bn mark for money raised for companies floating on it for the first time since 1995. The perception is that international firms receive higher valuations when selling their shares on US stock exchanges, and UK investors are relatively more risk averse than their American counterparts. The UK needs to invest in Britain based on reality, not just a PR campaign.