London loses another listing, but analysts worry about UK delisting

TUI has a dual listing between the two cities, but said in a statement on Tuesday that several investors had approached the company last year to ask whether this was still optimal, given changes in the company's share ownership structure and a “noted shift in liquidity”. From the United Kingdom to Germany.”

About 77% of transactions in TUI shares are currently settled via Germany, with the UK now accounting for less than a quarter.

“A lot of liquidity, volumes, have for some time already moved from the UK trading line to the Frankfurt trading line, so on the back of this, shareholders actually approached us last summer,” TUI CFO said. Officer Mathias Kipp told CNBC on Wednesday.

“A lot of the comments were about if we were to go to Frankfurt, firstly, the liquidity would be in just one fund. The other point was that a lot of people said ‘so you are more prominent in the MDAX than you are today in the FTSE 250’, and there were also some Comments that [the U.K.] The market environment may be more challenging today.”

British stocks are trading at a significant discount to the rest of Europe, having suffered an investor flight in recent years. The country's blue-chip FTSE 100 index has fallen almost 5% over the past year, compared with a 5% increase for the European Stoxx 600 index.

London is still a contender

London has also suffered a number of delistings and rejections of high-profile IPOs over the past year. The number of orders to be included in Square Mile It falls to a six-year low in 2023According to data obtained by investment platform XTB late last year and published in several UK media outlets.

The British semiconductor and software design company ARM, owned by Japanese investor SoftBank, chose last year to list on the Nasdaq Stock Exchange in New York, along with a number of other technology companies, despite the efforts made by Prime Minister Rishi Sunak's government to persuade the company to list. in London. .

“It is very disappointing to see another company leave the LSE's main market, after multiple acquisitions and delistings in the past year, and with companies like ARM turning to the Nasdaq for IPOs,” said Melanie Wadsworth, partner at international law firm Vigeri Drinker. . He told CNBC on Tuesday.

“However, I can understand the rationale behind this proposal, given that TUI is headquartered in Germany and only approximately 22% of its trading in 2023 was via the UK market. So I hope this decision is driven by private factors.” “with TUI, rather than as a trend indicator.”

Tom Bacon, partner at global law firm BCLP, said it was understandable for some to point to TUI's delisting as another example of companies moving away from London, but he agreed it was important to consider the details of the TUI case.

“Like many other recent examples, there are specific reasons for this decision related to the legacy merger of TUI Travel plc and TUI AG in 2014,” Bacon said by email on Tuesday.

“By various measures, London remains the largest stock exchange in Europe and has performed better in 2023 in terms of activity than other European stock exchanges such as Frankfurt, Paris and Amsterdam.”