The Central Inquiry: What motivates European companies to list on US stock exchanges?

In an interview with Euronews’ Angela Barnes, John Tuttle, Vice Chair of the New York Stock Exchange (NYSE), discussed the trend of European companies opting for US stock exchanges and the potential impact of the upcoming US elections on the IPO market. This conversation is part of Euronews Business’s series, “The Big Question,” which explores key topics with industry leaders.

The decline in the number of initial public offerings (IPOs) on the London Stock Exchange (LSE) in 2023, dropping to 23 from 74 in 2022, and a 39% decrease in total IPO proceeds for the Europe, Middle East, India, and Africa (EMEIA) region, as reported by EY’s Global IPO Trends 2023, has led to a shift. Conversely, the Americas experienced a 155% surge in total IPO proceeds in 2023, with 132 deals occurring on US exchanges. Notably, companies from Europe, Southeast Asia, and South Africa are increasingly considering listing in the US.

Tuttle highlighted the appeal of the US stock exchange, emphasizing its status as the world’s most attractive market due to its deep pool of liquidity, broad investor base, and focus on growth. The move to the US also opens opportunities for inclusion in various indices, attracting more capital and a stable shareholder base, potentially enhancing valuation. Increased bureaucracy, regulatory challenges, and investor dissatisfaction in parts of Europe, coupled with US regulatory advantages for technology and cryptocurrency companies, contribute to this trend.

However, Tuttle acknowledged that listing in the US presents challenges, including navigating macroeconomic conditions, understanding US-specific policies, and the complexity of transitioning from private to public status. While the upcoming US elections may not significantly impact IPO markets, concerns about declining business sentiment, government confidence, and global economic growth persist in 2024.

Tuttle expressed cautious optimism for 2024, recognizing the resilience of businesses and consumers but acknowledging potential challenges, including the delayed impact of interest rate increases and economic disruptions. The full interview with John Tuttle can be viewed on Euronews.

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