The London Stock Exchange is on course for its worst year for departures since the financial crisis (Image: Getty)
The London Stock Exchange is on course for its worst year for departures since the financial crisis in a crippling blow to its major league standing in international finance.
Some 88 companies have delisted or transferred their primary listing from the world’s main market, which was founded 222 years ago on December 1801, with only 18 taking their place.
There are now fears more FTSE 100 businesses – with combined market value approaching £3trillion – will quit the UK in favour of rival New York.
Xavier Rolet, who ran London Stock Exchange Group between 2009 and 2017, said lacklustre trading had created the “real threat” of more UK firms ditching listings in search of better returns stateside.
The figures mark the most significant defection of firms since the financial crash in 2009.
The number of new listings is also on track to be the lowest in 15-years as companies mulling public offerings are put off by cheap valuations compared to other financial centres, including Frankfurt.
More than £100billion worth of listed companies have prepared to leave London’s stock market this year, either by agreeing to takeover deals at often hefty premiums or to delist.
The alarming exodus continues despite efforts by the Government, regulators and the LSE to boost the attractiveness of the City.
Ashtead, the equipment rental company with a £23billion market valuation, became the latest big name to propose moving its primary listing from London to America. It follows Shell and Tui, Europe’s biggest travel operator.
Some 88 companies have delisted or transferred their primary listing from the world’s main market (Image: Getty)
Mr Rolet said: “Simple maths suggests that an illiquid market will require too much of an issuance discount for even a run-of-the-mill [initial public offering].
“The same illiquidity will also affect post-IPO valuation too. In other words the cost of equity capital would make such a market deeply uncompetitive.”
Shares in London now trade at an average discount of 52% compared to their US counterparts, according to analysis by Goldman Sachs.
But the current boss of the LSE warned companies tempted to move their listing from the UK that things rarely turn out well.
Julia Hoggett said: “Most countries in the world would aspire to have the capital markets that we’ve got. But we are not sitting on our laurels.
“We’ve looked at what happens to UK companies that have raised over £100m who go to the US. There have only been 20 in the last ten years.
“Eight have already delisted, only four are trading up and the rest are trading down by an average of 80 per cent.”
Earlier this year investors in Tui voted to leave the London Stock Exchange in favour of Germany.