Amidst the turmoil in the US stock market, some companies are reevaluating their plans to list in the US due to the uncertainty caused by recent events. The Trump administration’s tariff scheme has created a level of unpredictability affecting corporate sentiment, leading to decisions like Klarna postponing its US IPO and eToro delaying its US IPO roadshow. This trend might prompt other companies to seek alternative listings, potentially benefiting the London Stock Exchange.
Recent data shows that international IPOs in the US have experienced significant price drops post-listing, with a substantial number of UK companies that listed in the US since 2014 either delisting or trading below their IPO price. This shift in market dynamics could steer companies towards exploring listings in other markets like the London Stock Exchange.
The London Stock Exchange has demonstrated resilience and success as the leading European exchange, raising £7.4bn in equity capital through various transactions and IPOs in the first quarter of the year. Despite ranking fifth globally in Q1, exchanges like Hong Kong are gaining traction as preferred choices for companies, especially Chinese firms seeking foreign investment capital.
The London Stock Exchange achieved record-breaking milestones in March with the highest value traded on the orderbook since 2008 and notable increases in auction and ETP trading. Clive de Larrabeiti, a corporate finance adviser, highlighted the potential shift in listing preferences from the US to London due to the increasing uncertainty in the US market, driven by trade war implications.
London’s appeal extends beyond its stability, with its capital markets reform agenda garnering attention, potentially enhancing the LSE’s prospects. The exchange already hosts issuers from 48 countries with equity listed and could see an uptick in interest from issuers shying away from the US market, particularly Chinese companies seeking alternative listing venues.
Chinese sources in the capital markets sector have indicated a growing interest in London as a listing destination, especially amidst escalating US-China trade tensions. The UK’s relative stability and neutrality position it favorably for companies considering listings outside the Asia Pacific region.
The evolving market dynamics and geopolitical uncertainties are reshaping the global listing landscape, with the London Stock Exchange emerging as a promising alternative for companies seeking stability and growth opportunities amid volatile market conditions.