Rolling coverage of the latest economic and financial news, as Taylor Wimpey says weaker economic backdrop is hitting the near-term outlook
More London-listed companies could choose to follow CRH’s plan and shift their primary stock market listing to New York, predicts Russ Mould, investment director at AJ Bell.
Mould says the London Stock Exchange is “having to work overtime” just to keep the companies it already has, rather than managing to attract new ones by relaxing its rules.
“This week has delivered a triple blow to the stock exchange operator. First, we had reports that Shell looked at shifting its stock market listing and headquarters to the US, although that doesn’t seem to be on the table now. Second, reports suggest that chip designer Arm will not return to the London stock market and instead opt for a US listing.
“Now we’ve got the news from construction group CRH that it wants to switch its primary listing to the US. That would mean it no longer qualifies for inclusion in FTSE indices and therefore would leave the prestigious FTSE 100 index.
The US is expected to be a key driver of future growth for CRH and our exposure to this market is likely to increase further driven by substantial increases in infrastructure funding, a renewed drive for the onshoring of manufacturing activity and significant levels of under-build in the residential construction market.
The fact that world’s largest building materials company plans to abandon London for New York is a bitter blow for the former – just as it was revealed that Shell too thought about the move and Flutter looks to take a punt on the US.
About three-quarters of earnings for CRH derive from North America, – the move is pragmatic for the board but far more symbolic for the London Stock Exchange and the City. It’s a sign of decline and underlines the need to revitalise public markets in the UK. It’s not just companies moving listings abroad like Ferguson, it’s the huge slate of takeovers that has decimated corners of our markets due in large part to the weak pound and depressed UK valuations. Time for major change.