The status of London, which shone as a global financial hub, is declining. In the first half of this year, the London stock market recorded the lowest corporate public offering (IPO) performance in nearly 30 years. While the number of corporations pursuing IPOs is decreasing, the number of corporations leaving the London stock market is rapidly increasing, spreading a gloomy outlook.
According to Bloomberg on the 2nd (local time), the amount raised by corporations listed in London through IPOs in the first half of this year was estimated to be below £200 million (about 370.2 billion won), the lowest level since 1997. The only notable IPO corporation this year was MHA, an accounting and business advisory firm, which raised £98 million (about 18.14 billion won) by listing on the Alternative Investment Market (AIM).
Corporations' IPOs are also increasingly being canceled. Cobalt Asset Investment, the largest corporation among those planning to list on the London stock market this year, canceled its listing plan last month, and the Chinese fast fashion company Shein also decided to abandon its London stock market listing and pursue an IPO in Hong Kong.
While the number of corporations going public has sharply decreased, the number of corporations escaping the London stock market is rapidly increasing. Bloomberg recently estimated that the market capitalization of corporations that have relocated to or plan to relocate to New York in recent years amounts to over $100 billion (about 136 trillion won). Recently, the British remittance firm Wise announced its move from the London stock market to the New York Stock Exchange.
Pharmaceutical company AstraZeneca, which supports the London stock market, is also seeking to transfer to the New York Stock Exchange. Earlier, The Times, a British daily, reported on the 1st, citing anonymous sources, that AstraZeneca is discussing both the transfer of its listing and headquarters relocation due to complaints about UK pharmaceutical regulations and concerns that its domestic life sciences industry is falling behind the United States and China.
Bloomberg noted, "If the UK's number one market capitalization corporation leaves the London stock market, it could have a significant impact on the financial industry as a whole," adding, "There are concerns that this could lead to more corporations joining the trend of leaving London."
Key reasons for the departure of British corporations include high growth potential in the North American market and abundant investor capital. Bloomberg reported that stocks of corporations like AstraZeneca are traded more actively in the U.S. than on the London stock market via American Depositary Receipts (ADR). Exchanges in Italy, France, and Switzerland have also seen lower trading volumes than London for similar reasons, and Europe as a whole recorded its lowest IPO performance in a decade during the first half of this year.
Moreover, as cases of mergers and acquisitions involving corporations listed on the London stock market are increasing, the contraction of the stock market seems likely to continue. According to data collected by Bloomberg, 48 acquisition transactions involving Spectris, Deliveroo, and Asura have been completed or are in progress this year. This indicates that more and more corporations are leaving the London stock market.
Charles Hall, head of research at British investment bank Peel Hunt, said, "The scale of mergers and acquisitions (M&A) and the lack of IPOs are significantly reducing the number of listed growth corporations in the UK," adding, "There is a continuous outflow of British capital, and this issue needs to be addressed through reforms to pensions, Individual Savings Accounts (ISA), and inheritance taxes."
However, there is still some hopeful news. Italian food and beverage company New Prince, fintech firm Ebury, and Uzbekistan’s Navoi Mining & Metallurgical are weighing their listings on the London stock market this year. Andreas Bernstorff, head of equity capital markets at BNP Paribas, said, "It doesn't seem like IPOs are lined up in London, but there are several candidate corporations."