European companies that have added US extract often do not see an increase in their valuation, the Financial Times found that they claim that the presence on the stock market in New York is certainly a cup for higher price prices.
Analysis of 12 European companies that have added American extracts since 2016-including Ferguson, CRH and Flutter entertainment – found that in the middle of cases the valuation dropped, while in many cases there was no increase in the number of analysts monitoring shares. However, two -thirds of the companies enjoyed more liquidity in their events after moving.
“The basic work you move to the US and your stock price is improving is not right,” said Richard Werner, partner of BCLP. “It's definitely not that simple.”
European companies and their investors were lured A huge increase in the US stock market In recent years, they have believed that the recent selling on the market-they will use multiples of higher earnings.
British broker TP ICAP said last week that he is planning Please provide your data business in New YorkWhile in February Glencore List List said he was reviewing whether other places-including the US-be “more suitable” for trading in their shares, in a potentially large wound in the London historical position as the Center for Mining Finance.
Building group on London List Ashtead shift plans His primary list to New York and its CEO said: “The benefits of the US primary list in other markets. . . have manifested themselves in the last few years. “British advertising group has WPP “Look at” the switch while the French asset manager Chewn It is also considering such a step.
FT findings come as European politicians who are urgently trying to revive domestic markets and encourage society to remain at home. In the UK they have regulatory bodies Revised rules For these companies in an effort to make London more competitive.
The companies analyzed by FT all added new US citations – either the primary or other list – while maintaining their European extracts.
Ferguson and Flutter Entertainment Group Group suppliers are among the groups that have added American lists in recent years, as well as smaller companies such as Himalaya and the pharmaceutical company for dry volume.
FT found Irish groups of building materials Crh“The Indiviors and ship groups of Okeanis Eco Tankers were the only companies that enjoyed an increase in all three analyzed measures – valuation, volume sharing and analysts that followed – while Burford Capital and the Spanish Ferrovial Infrastructure Group did not experience any contribution. Others did not reach at least one measure.
The award of half of the analyzed companies was lower in New York than in local markets before movement, with smaller shares hit heavier. On average, in New York, New York, on average, about 7 % lower prices/earnings ratio for 12 months for smaller companies-with less than $ 10 billion per market capitalization-while for larger companies it was about 1 %.
“For European companies smaller or middle chapters, the secondary list in the US does not have to generate interest among US investors looking at larger companies where it is more global recognition,” said Apostolos Thomadakis, research leader in the European capital market.
CRH, however, enjoyed a permanent increase in the valuation of its list in New York. Its average ratio of P/E increased from 12 times in 18 months before it changed its primary list to the US to an average of 15 times in 18 months.
Flutter, who added an American quote in January 2024 and then made his primary list from New York in May, did not experience any improvement – his ratio P/E dropped from an average of 29.8 times in the UK to 29.1 times.
Likewise, the former FTSE 100 Constituent Ferguson and Ferrovial, whose average US awards were 9 percent AO 11 percent lower after American movement.
Adding a US list can be an expensive step – Werner BCLP has said that costs can range from approximately 500,000 GBP to more than 1 million GBP, depending on the extent of the legal, accounting and investment banking services and stock exchange fees. Companies also have another, continuing cost of reporting reports of statement, which can meet tens of thousands of dollars annually.
“There are many direct costs and indirect costs,” said Kim Ball, CFO of Torm, who in 2017 added a list of NASDAQ.
FT analysis did not take into account factors such as the publication of the company, regulatory changes, or shifts in the sector's valuation, which could affect the ratio of P/E.
Most companies benefit from greater liquidity – the lightness with which the shares can be traded without necessarily moving the price. Large companies have seen an average of approximately four times when comparing their shares on the list of European shares, while small companies witnessed almost 45 % of the increase.
CRH liquidity is now about seven times higher in New York. But the liquidity of Ferrovial was crying there: about 37,000 of its shares in the US in the US, compared to more than 1mn in Europe in 10 months before and after the US.
This was “as expected with the new NASDAQ list”, Ferrovial said FT, and added “The intention of the group is to build further liquidity in the US over time”.
FT also found that there was no small or no increase in analytical coverage for a number of companies analyzed, although bosses often quote greater visibility as a reason for the presence in New York.
Oliver Lazenby, a partner of Freshfields, said: “All these things are final, analysts in banks and institutional investors do not necessarily have to [to cover every single company]”
The mere size of US markets means that investors and analysts tend to notice more companies such as flutter or CRH, added.
“In the larger Sea, attention tends to go to larger fish,” said Paul Amiss, a partner in Winston and Strawn. “If you are a tenth of this size, then you will have to work harder to create waves.”
Methodology
New York Stock Exchange and Nasdaq have provided FT lists of European companies on the list that have been added by US statements since 2016. Large companies are defined as market capitalization companies of more than $ 10 billion. FT analysis gained the ratio of share-measured as the ratio of four-week volume trading with the average number of its shares, which is outstanding, expressed as a percentage-like liquidity. Space and ADR were omitted.
In order to remain a time interface between US quote and European, FT used the number of weeks from the date of the US list to the present and used the same number of weeks for the period before moving the US. In cases where there was a longer run of US business data, we used a complete series in both. While all efforts were made to create an exhaustive data set, there was no direct way to combine a comprehensive list of companies and some of them may be missing. Initially, we found 15 companies that have added a US list since 2016, but the three-Flex LNG, Nyxoah and Alvotech-not continuous data on their forward 12 months of multiples of earnings due to negative earnings' forecasts, so they were omitted from the analysis. For visual purposes, four data points in Torm were also excluded, where the P/E ratio briefly exceeded 50, also excluded. The relatively small sample size in this case is inevitable, which can distort results. Data to 28 February.
