The UK’s reputation as a major international financial centre has suffered a double blow after a major technology company ignored pleas from the Prime Minister to list in London – opting instead for New York.
It suffered a second blow when CRH, one of the world’s biggest construction materials groups, said it would recommend to its shareholders that it quit London and also list in New York.
Arm plc, described as a “jewel of the UK technology industry” as it designs technology found widely in electrical equipment around the world, is reported to have chosen to list in New York, despite being wooed by both Rishi Sunak and former PM, Boris Johnson. Its owners, SoftBank Group, will keep its headquarters in Cambridge, it was reported.
The decision not to list Arm in London came as the Government’s technology strategy was called into question by Jamie Urquhart, the tech firm’s co-founder. Mr Urquhart criticised ministerial plans for developing and manufacturing semiconductors.
He said the US, China and Europe, and Japan had all pushed ahead. “There is very little here in the UK. I think the Government are either unwilling to grasp the nettle or just have way too much else on to do and just aren’t thinking about it,” he told Bloomberg radio.
Gambling group Flutter is also considering switching to the US and it was reported that oil and gas firm Shell also thought about a move. Several other firms have explored, or are actively considering, shifting their listing to the US.
Flutter said that early feedback from shareholders had been supportive. Last year, Ferguson, the plumbing group, moved its primary listing to New York, exiting the FTSE 100.
Rachel Reeves, Labour’s shadow Chancellor of the Exchequer, said companies looking to relist outside London “should be a huge cause of concern to the Government, both in terms of the prestige of the UK economy but also future tax revenues too”.
Russ Mould, chief analyst at AJ Bell said: “London Stock Exchange is having to work overtime just to keep those already listed, let alone attract new ones.
“Efforts to relax the listing rules to attract more companies to London come across as a bit desperate.
“It should be a badge of honour to list in the UK, but that reputation is dwindling fast. Overseas investors lost interest in the trading venue as soon as the UK voted in favour of Brexit, and valuations have got even cheaper. That’s hardly a good sales pitch to attract more big companies.”
London Stock Exchange boss David Schwimmer insisted London was “the most international financial centre in the world” and was continuing to attract companies and investors. Reforms unveiled by the Government would increase its appeal as a financial centre, he said.