London’s listing difficulties reflect a wider global issue, with similar problems being faced in the U.S. and Asia, as noted by the CEO of the London Stock Exchange Group.
According to EY, only 18 initial public offerings occurred on the London Stock Exchange last year, with eight of those happening in a late-year surge.
However, LSEG CEO David Schwimmer pointed out that this situation is not limited to London.
“We’ve seen a relatively weak IPO environment worldwide, including in New York and Hong Kong,” he told CNBC. “It’s drawn significant attention.”
There are growing concerns that London’s attractiveness is diminishing, especially as major companies like Glencore contemplate relocating, following the departures of Flutter Entertainment, Tui, and Just Eat Takeaway. In total, the LSE experienced 88 companies leaving last year due to delistings or relocations—the highest figure since 2009.
Schwimmer warned against the assumption that other markets might be better options.
“When you look at U.K. companies that have moved to New York, the results haven’t been great,” he said on CNBC’s “Squawk Box Europe.”
“Over the past decade, 20 U.K. firms have listed in New York, each raising over $100 million. Of those, only four are trading higher, about nine have delisted, and the rest have seen their stock prices drop by over 80%. So the idea that the grass is always greener isn’t necessarily true.”
Euronext CEO Stéphane Boujnah also commented, stating to CNBC that “London has lost its leadership when it comes to share liquidity.”
Strong Pipline
Despite London’s listing activity reaching a multi-decade low last year, with total proceeds falling nearly 20% compared to 2023, the LSEG chief is optimistic about 2024, pointing to a much stronger pipeline ahead.
Schwimmer emphasized the robust capital raising beyond IPOs, mentioning that follow-on offerings have seen remarkable success.
“If you look at the capital raised on the London Stock Exchange—not just from IPOs, but also from follow-ons—that market is thriving,” he stated. “In fact, more capital has been raised on the LSE than on the next three largest European exchanges combined.”
Goldman Sachs is optimistic about the future of the U.K.’s IPO market. Richard Cormack, who leads equity capital markets for EMEA at Goldman Sachs, forecasted in February that IPO activity would pick up in 2025 as the political uncertainty following last year’s elections diminishes.
While some U.K. and European companies may still consider the U.S. market, Cormack indicated that a significant shift of non-tech, non-biopharma firms listing outside their home regions is unlikely.
Hong Kong’s Resurgence
The U.S. has long been the leading destination for cross-border listings, but this dominance is now facing competition from a rising player: Hong Kong.
As reported by the Financial Times, the city is preparing for a $20 billion IPO resurgence this year, partly driven by increasing trade tensions between the U.S. and China.
Hong Kong’s attractiveness was highlighted by the recent launch of Mixue, China’s largest bubble tea chain, which saw its shares soar over 40% on the first day of trading. The listing attracted significant interest, with the Hong Kong portion oversubscribed 5,200 times and the international segment more than 35 times oversubscribed.
Bonnie Chan, CEO of Hong Kong Exchanges and Clearing, remarked on the heightened interest from global investors.
“We’re seeing significantly stronger demand from the U.S., Europe, and beyond,” she shared with CNBC’s Squawk Box Asia. “Investors are clearly eager to participate in these large IPOs.”
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