There has been a cloud over the London Stock Exchange (LSE) in recent years, with a number of companies – CRH among them – shifting their main listing to the US while others decided to go public on an American market instead of the UK capital.
That led to a huge amount of hangwringing in The City, with various doomsayers warning of the decline of London as a financial hub.
Last year the LSE faced a dearth of listings, to the point that the regulator changed rules to allow overseas companies to have secondary listings there, a tacit acceptance that the exchange now plays second fiddle to the US behemoths of Nasdaq and the New York Stock Exchange.
All this will probably sound familiar to any followers of the Irish capital markets scene. Euronext Dublin, as the Irish Stock Exchange is known these days, has been haemorrhaging listings in recent years. The exchange has been pleading with the Government to amend tax rules on holding shares in an effort to boost transactions on the Dublin market.
In the budget, then minister for finance Paschal Donohoe reduced tax on gains made by Irish investors in investment funds and scrapped stamp duty on share trading in public companies worth up to €1 billion. Still, only one small company has moved to go public here since then.
In the UK, it would seem to be a different story. There is optimism among bankers of a slew of listings to come this year, and British chancellor Rachel Reeves hailed a “new golden age” for The City this weekend, according to the Financial Times.
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Requirements for bond and share listings have been eased, while the British government created a stamp duty holiday for three years on sales of stock in newly listed businesses.
Those measures have helped to revive the market, with financial firm Shawbrook among those to have floated last year. Now, numerous firms are tipped to list in London this year and things are looking up. That’s in contrast to Dublin, where the mood music is still pessimistic despite Donohoe’s changes.
The uncomfortable truth is that London has been a global financial centre for centuries. Dublin, if it is a global centre, has only held that position for decades. It will take a long time for it to attract big firms that are not Irish.
Tough days remain ahead for Euronext Dublin.