Friday, 30 June 2017

AIMing high: London listings more liquid than Australia and Canada

By Will Forbes

Companies often ask us our opinion on listing whether they should consider listing on other exchanges to boost liquidity and move their shares closer towards their perceived fair value. The answer is a complex one, market timing, industry and peer group as well as overall market sentiment and always have an impact on the answer. However, the chart below indicate the added liquidity that companies see in London (vs Australia and Canada).

Source: Bloomberg, Edison Investment Research
Of the 35 examples we found (the vast majority in the oils and mining spaces), only ten saw higher share values traded in the two non-London exchanges examined. In all other, London trading dominates the shares. Below is the ratio of value of shares traded (30 moving average) between London and Australian/Canadian listings. In many cases, it may be better to ask why list on any other exchange at all?