The exchange contributes around three per cent of annual revenues of its parent group. The chief executive of the company which owns the London Stock Exchange (LSE) says he’s optimistic about the future despite a wave of businesses departing the capital - and suggested there’s little evidence to suggest a move abroad ultimately benefits companies.
London suffered a spate of high-profile exits of late, including 2024 seeing the biggest outflow of listed companies since the financial crisis. Higher perceived valuations in US markets have led to some departing these shores for the other side of the Atlantic, with ARM opting to IPO in New York instead of London and the likes of Just Eat, Ashtead, Flutter and Tui all choosing to swap primary listings in a similar vein.
While oil behemoth Shell recently said a switch away from London wasn’t a live issue for them, £40bn mining giant Glencore are considering exactly that, looking at exchanges which may be “better suited to trade our securities”, as CEO Gary Nagle explained.
However, that’s not an immediate concern for David Schwimmer, chief executive of London Stock Exchange Group (LSEG), which owns the London Stock Exchange. “There’s lots of questions and focus on IPO but if you look at the capital raised in general, including the follow-ons, this is a very healthy market with plentiful liquidity and lots of activity.”.
Mr Schwimmer offered the assessment that only 20 per cent of companies who have made the journey from the LSE to the NYSE over the last decade have resulted in an ongoing benefit to shareholders - while more have seen significant erosion of share price.
“If you take a look at the companies that have gone from the UK to list in New York over the last ten years it’s about 20 companies. Of those 20, four are trading up, nine are delisted, and the rest are trading down by an average of over 80 per cent.
“When you look at the facts and you look at the strength of the London market in terms of the broader capital raising, you look at the reforms and innovations that are coming to this market, I feel very good and very confident about the direction of travel,” he added.
The actual London exchange only now contributes around three per cent of LSEG revenues for the year, with the wider business being focused on data analytics and technology services. LSEG as a whole has a market capitalisation of more than £62bn, making it the eighth-largest company on the LSE. Shares in LSEG are up by around a third over the past year.
