British stock market will no longer be the basis for 88 companies in 2024; main attraction is the largest exchange in the USA
In 2024, the London Stock Exchange had the largest migration of companies to other stock markets since 2009, during the global financial crisis. The newspaper Financial Times reported that 88 companies left the London Stock Exchange during the year (read , for subscribers). There were 18 companies entering the London Stock Exchange in 2024. Market analysts believe that this demonstrates the loss of dynamism in the UK economy.
The biggest attraction for companies that migrated was the New York Stock Exchange. Some went to exchanges in other countries. Some of the companies that left maintain shares on the London Stock Exchange, but without it being their main base. This reduces the volume of shares traded by these companies and the relevance of the London Stock Exchange.
The expectation of capital market analysts is that the migration will continue in 2025. Ashtead, a company that rents construction equipment, announced on December 10 plans to move from the London Stock Exchange to the New York Stock Exchange (read , for subscribers). The company had a market value of 28 billion pounds before the announcement (R$218 billion).
BHP WENT TO SYDNEY IN 2022
One of the main moves of companies from the London Stock Exchange to other locations was in 2022. BHP, a mining company, began to have the Sydney Stock Exchange in Australia as its main base. The company has a market value of US$125 billion (R$775 billion).
Analysts said at the time that the move was not worrying because BHP has the majority of its business and operations headquarters in Australia. Other companies migrated because of mergers, mainly with US companies. In these cases, the corporate headquarters and share trading base tend to be in the largest country.
But the mergers are also an indication of the loss of dynamism in the UK economy in the opinion of some analysts. According to Goldman Sachs, global GDP (Gross Domestic Product) will grow 2.7% next year. For the USA, the projection is 2.5%. For the United Kingdom, a little more than half: 1.3%. That’s more than the Eurozone (0.8%). But insufficient to maintain competitiveness compared to the USA.
CONCENTRATION FAVORS USA
The London Stock Exchange is 222 years old. It is the largest in Europe. But, in the stock market, there is a tendency for global concentration. Therefore, the weight of the USA should grow. Study by Goldman Sachs that earnings projections on the New York Stock Exchange in 2025 exceed those in London.
The study also mentions the large participation of pension funds in the New York stock market. There are plans by the British government to make the London Stock Exchange more attractive through regulatory reforms.
There are analysts who do not consider company migration to be a serious problem. They argue that the most important thing for the London Stock Exchange is the trading of fixed income securities, corporate and government debt securities.
