Recent data from EY shows that the London Stock Exchange will see the biggest outflow since the financial crisis. Many companies have cited declining liquidity and reduced valuations as their main reasons.
EY reports that 88 companies have delisted or moved their primary listings from the main exchange, the most since 2009.
Just Eat Takeaway, Flutter Entertainment and Tui AG travel company, as well as Ashtead Group, a rental equipment firm, are among those that have announced their plans to drop the main UK listing.
Other companies, such as Watches of Switzerland Group PLC, faced pressure from activists investors to switch their primary stock exchange listing to the US.
Delistings are also a result of mergers and acquisitions
Scott McCubbin is EY’s IPO Lead for UK and Ireland.
The valuations of stocks and the liquidity have been affected by geopolitical instabilities, slow growth economics and pension fund’s reduced appetite for local equities.
“We also witnessed the biggest outflow of firms from the main exchange since the global economic crisis, as they sought to access a larger pool of investors or improved liquidity at other exchanges,” said Mr. He.
Analysts have noted that while certain companies delisted to enter the US market, the majority were delisted due to mergers and purchases.
The National reported that Russ Mould is the investment director of AJ Bell. He said, “Nearly fifty were acquired at an average price premium of 45 percent.”
The price paid or the valuation is what determines the investment return.
The IPOs are much less than the delistings
Only 18 companies were listed at the Stock Exchange, the lowest number since EY began recording data in 2010.
There were notable debuts, such as the French film and TV production company Canal+. It was 2024’s first flotation of more than PS1 billion, valuing the capital at PS2.6 billion.
Insiders in the market are cautiously optimistic for 2025.
Shein is one of the most prominent potential listing candidates. The fast fashion giant has re-evaluated its US IPO plan due to accusations that it used forced labor within its supply chain.
Canopius, an insurer, and Newday Consumer Credit are preparing to float shares that may be worth up to PS3 billion (£3 billion) and PS1.5 billion (£1.5 billion), respectively.
McCubbin added that there were reasons to be cautiously optimistic as we approach 2025.
London could see a surge in activity during the first half 2025 due to a stabilised policy environment, boosted pipeline and reforms in listings.
As updates occur, this post London Stock Exchange witnesses the largest outflow of firms since global financial crisis could be changed.
This site is for entertainment only. Click here to read more
