In European companies that have added a US list, their ratings are often increased, the Financial Times has determined that the claims of some managers that a New York stock market presence is a secure route to higher share prices.
An analysis of 12 companies listed in Europe, which have added the US list since 2016-input Ferguson, CRH and Flutter entertainment – noted that the ratings have decreased in half of the cases, while in several cases the number of analysts that are in the existence did not increase. However, two thirds of the companies enjoyed more liquidity in their shares after moving.
“The basic thesis that you switch to the USA and your share price does not improve,” said Richard Werner, partner of the law firm BCLP. “It’s definitely not as easy as that.”
European companies and their investors were anchored by the The enormous increase in the US stock market In recent years, it has believed that Sie-Rotz of a recently published market sales dort will enjoy greater profits.
The British broker TP ICAP announced last week that it was planned List his data business in New YorkWhile Glencore was performed in London in February in February, it checked whether other event locations-and the USA “better suited for the trade of their shares, checked in a potentially great blow to the historical status of London as the center for mining finance.
London Association AshTead Moving plans The main list in New York and his managing director said: “The advantages of a main list of US US compared to other markets. . . have become clearer in recent years. “The British advertising group has WPP “Look at yourself” A switch while the French asset manager manager Chew Such a step also takes into account.
The results of the FT come when the European political decision -makers are urgently trying to revive the domestic markets and encourage companies to remain listed at home. In the UK, the supervisory authorities have Outdated rules For listed companies to make London more competitive.
The companies analyzed by the FT have added all new US quotes – either a primary or an additional list – while keeping their European lists.
The plumbing device supplier Ferguson and the Flutter Entertainment gambling group based in Great Britain have been among the groups that have added US listings in recent years, as well as smaller companies such as the Dry Bulk Operator Himalaya Shipping and Pharmaceutical Company Indivior.
The FT found the Irish building material group CRHThe Indivior and Ship Group Okanis Eco -tanker were the only companies that increased all three analyzed measures – evaluation, stock volumes and analysts – while the legal dispute specialist Burford Capital and the Spanish infrastructure group Ferrovially have no advantage for none. The others were missing at least one measure.
The ratings of half of the analyzed companies in New York were lower than in the local markets before moving because smaller stocks were more difficult. On average, the striker of the 12-month price/meter ratio for smaller company-the market capitalization of less than 10 billion USD-in New York was around 7 percent, while it had about 1 percent less for larger companies.
“For smaller or medium-sized European companies, a secondary list in the United States cannot arouse interest among US investors who consider larger companies in which brand recognition is global,” said Apostolos Thomadakis, head of research director at Think-Tank The European Capital Markets Institute.
However, the CRH enjoyed a continued rating thrust from the New York list. The average P/E ratio rose in the 18 months in the 18 months from 12 -to an average of 15 -in the 18 months.
But Flutter, which added a US quote in January 2024 and then made New York in May 2024, did not improve -his P/E ratio fell from an average of 29.8 -fell in Great Britain to 29.1 times.
So also the former FTSE 100 components Ferguson and Ferrovially, whose average US ratings were 9 percent or 11 percent lower after moving movements.
Adding a US list can be an expensive step -Werner from BCLP said that depending on the scope of the legal, accounting and investment banking services used, the costs can be around 500,000 to more GBP. Companies also have additional, ongoing reporting costs for maintaining the admission that can take tens of thousands of dollars a year.
“There are many direct costs and indirect costs,” said Kim Balle, Chief Financial Officer from Torm, who added a list of the Nasdaq exchange in 2017.
The analysis of the FT did not take into account factors such as company results, regulatory changes or shifts of the sector reviews, which could all affect the K/E relationship of a company.
Most companies benefited from greater liquidity – the ease with which stocks can be traded without absolutely relocating the price. Large companies experienced an average of about four times when they compared their stocks listed in Europe with their US stocks, while small companies experienced an increase of almost 45 percent.
CRH’s liquidity is now about seven times higher in New York. Ferrovially there is sworn there: around 37,000 of its shares per day are traded in the United States in the United States, compared to more than 1 million in Europe in the 10 months before and after the move of the United States.
This was “as expected at the new NasdaQ list,” said Ferrovially the FT and added the group’s intention to set up additional liquidity in the USA over time “.
The FT also found that there was little or no increase in analyst coverage for a series of analyzed companies, although Bosse often instructs greater visibility as a reason for a presence in New York.
Oliver Lazenby, partner of the law firm Freshfields, said: “All of these things are finally, analysts from banks and institutional investors do not necessarily have the resources (to cover every single company).”
The sheer size of the US markets means that investors and analysts draw larger companies such as flutter or CRH more attention, he added.
“In a larger sea, attention is paid to the larger fish,” said Paul Amiss, partner at Winston and Strawn. “If you are a tenth of this size, you must clearly work hard to hit waves.”
methodology
The New York Stock Exchange and the Nasdaq delivered the FT with lists of companies that have added US listings since 2016. Large companies are defined as those with a market capitalization of more than $ 10 billion. The analysis of the FT took the equity sales rate of a company-measured as the ratio of the four-week trading volume of a share to the average number of its outstanding shares, which are expressed as a percentage-as a measure of liquidity. Spacs and ADRS were omitted.
In order to keep the time scales between a US quote and a European quote, the FT used the number of weeks from the US Listing date to the present and applied the same number of weeks to the period before the USA moved. In cases where there was a longer run of US trade data, we used the entire series in both. While all efforts were made to create an exhaustive data record, there was no easy way to bring together a comprehensive list of companies, and some may be missing. We initially found 15 companies that have added a US list since 2016, but three-flex LNG, Nyxoah and Alvotech-Hatten no continuous figures for their 12-month variety of price due to negative profit forecasts that were left out of the analysis. Four data points in Torm, whereby the P/E ratio exceeded 50, were also excluded for visual purposes. The relatively small sample size in this case is inevitable, which can distort the results. February 28th.
