What's happened
Wise, formerly TransferWise, has announced it will shift its primary stock listing to the US, maintaining a secondary listing in London. This decision follows a trend of companies leaving the London Stock Exchange, which has faced significant challenges in attracting new listings. Wise's profits and revenue have shown growth, with shares reaching an all-time high.
What's behind the headline?
Market Dynamics
- Exodus from LSE: The London Stock Exchange (LSE) has experienced a significant outflow of companies, including Indivior, which recently canceled its secondary listing in London. This trend raises concerns about the LSE's competitiveness in attracting and retaining businesses.
- Wise's Strategic Move: By relocating its primary listing to the US, Wise aims to capitalize on greater liquidity and potential inclusion in major indices like the S&P 500, which could attract more investment.
- Financial Performance: Wise reported a 17% increase in pre-tax profits and a 15% rise in revenue, indicating strong operational performance that supports its decision to shift listings.
- Investor Sentiment: Following the announcement, Wise's shares surged by up to 9%, reflecting positive investor sentiment and confidence in the company's future prospects.
Implications
- For the LSE: The loss of Wise and other companies could further diminish the LSE's stature as a leading global exchange, necessitating urgent reforms to attract new listings.
- For Investors: Investors may benefit from Wise's move as it seeks to enhance its market presence and operational efficiencies in a more favorable trading environment.
What the papers say
According to Karl Matchett in The Independent, Wise's shift to a US primary listing is seen as a strategic move to enhance its market position, stating, "the company believes it will accelerate our mission and bring substantial strategic and capital market benefits." Meanwhile, Julia Kollewe from The Guardian highlights the broader trend of companies like Indivior abandoning the LSE, noting that "the pressure is on to attract new names to the market and keep existing ones." This sentiment is echoed by Anna Wise, who points out that the LSE has faced the largest exodus of companies since the global financial crisis, emphasizing the need for the exchange to adapt to changing market conditions.
How we got here
Wise's decision to move its primary listing to the US comes amid a broader trend of companies exiting the London Stock Exchange, which has seen 88 companies delist or transfer their primary listings since 2024. The company aims to enhance liquidity and strategic benefits by focusing on the US market.
Go deeper
- What are the implications for the London Stock Exchange?
- How will Wise's move affect its investors?
- What other companies have left the LSE recently?
Common question
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Why Are UK Firms Moving Their Listings to the US?
The trend of UK firms shifting their stock listings to the US has raised eyebrows and sparked discussions about the future of the London Stock Exchange. Companies like Wise are leading the charge, citing better opportunities in the US market. But what does this mean for investors and the UK economy? Here are some common questions and answers about this significant shift.
More on these topics
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London Stock Exchange is a stock exchange in the City of London, England. As of April 2018, London Stock Exchange had a market capitalisation of US$4.59 trillion. It was founded in 1571, making it one of the oldest exchanges in the world.
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The United States of America, commonly known as the United States or America, is a country mostly located in central North America, between Canada and Mexico.
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The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom or Britain, is a sovereign country located off the northÂwestern coast of the European mainland.