The US stock market has overtaken Europe in the new listings

  • British chip designer Arm, which is owned by Japan’s Softbank, announced earlier this month that it is seeking a US listing this year.
  • Building materials giant CRH, which is headquartered in Ireland, said it would move its primary listing to the US
  • On top of higher valuations, Caroline Simmons, UK chief investment officer at UBS, confirmed that the US offers a broad range in a way that European exchanges do not.

People clap as the closing bell rings at the New York Stock Exchange.

Michael M. Santiago | Getty Images News | Getty Images

Analysts told CNBC that the US is more attractive than European bourses in terms of new listings and there is not much the Europeans can do to change that.

British chip designer Arm, which is owned by Japan’s Softbank, announced earlier this month that it is seeking a US listing this year. This is despite intense lobbying efforts from British officials to see the company debut on the UK market

Building materials giant CRH, which is headquartered in Ireland, said it would move its primary listing to the US, citing “increased trading, operations and acquisitions. opportunities. “

Both examples show how the US stock market is more attractive to the corporate world.

There are two main reasons for this, Roger Jones, head of equity at London & Capital, told CNBC.

“Sellers or listings can get better prices in the US which is still trading at much higher valuations than Europe. Secondly, a lot of the favored sectors, also industries that were immature companies looking to market, are big in the US sectors like tech and bio. / MedTech and telecom companies.

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Northvolt, a battery manufacturer from Sweden, is still in the start-up phase but has plans to be listed in the future. CEO Peter Carlson told CNBC in February that he was considering a dual listing, one in Sweden and one in the US

“In the long term, I will certainly see this as an opportunity,” he said.

In 2022, there were 130 US deals in new initial public offerings, which raised about $9 billion, according to Data from EY. Almost 70% of these IPOs were on US stock exchanges.

In addition to the higher valuations, Caroline Simmons, chief investment officer for the UK at UBS, confirmed that the US offers a wide range in a way that European exchanges do not.

She called it the “aggregation effect” – highlighting how easy it is to get investment when you’re in the same space as other companies in the same sector. This is why tech companies like Arm look to the US for new listings given how many other tech companies are also listed there.

Simmons also said there was “no structural reason” that Europe could not attract the same level of rosters. “But it comes down to the public debate,” she added, “and so there’s not much Continent can do about it.”

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