Activists push for companies to switch listing from one jurisdiction to another mostly in the hunt for better valuations, rather than because of the regulatory environment, according to new research.

The news comes after figures showed companies moving their listings from one market to another reached record numbers only halfway through the year.

Figures from SquareWell show activists overwhelmingly cite valuation for moving a stock, along with a desire to see a stock price reflect other issues, such as profit and being closer to a shareholder base or increasing the volumes of trading.

Seeking an alternative regulatory environment comes only fifth within the list of activist priorities, equal to concerns about the opportunity for M&A.

“Campaigns for listing switches rarely criticise the company and its financial performance, but the exchange and local market for not recognising a higher valuation for a superior company,” says SquareWell in a report.

‘Notable trend’

Chinguun Nyambat, an associate at SquareWell, says: “We’re seeing a notable trend of companies considering listing switches over the coming years, with momentum likely increasing even within the next 12 months.

“This is far from a UK-specific issue; it’s shaping up to be a global trend affecting multiple markets.”

He points out that, in the coming years, companies with significant business outside their listing jurisdictions may find it harder to justify their location “without a compelling valuation-boosting plan”. Nyambat says the route forward may be more “long-term valuation-creation strategies”.

The news comes in a year in which there has been intense debate about the City of London and its ability to attract new listings or keep the companies already listed on the London Stock Exchange.

SquareWell notes that, in 2024, Glencore came under pressure from Tribeca Investment Partners to move its listing from the UK to Australia, while Rio Tinto, another mining giant, faced calls from Palliser Capital to consolidate its dual listing from the UK and Australia to Australia alone.

Moving mountains

Mining firms appear particularly susceptible to demands to switch.

However, last year, BAT saw pressure from GQG Partners to move from London to New York. There was also a completed listing move in 2023, with CRH completing its move to the US after first facing demands in 2019 from Cevian Capital.

SquareWell also found that company-driven switches reached record levels in 2024, with three major moves, including Flutter Entertainment, a large cap company, and pharmaceutical company Individior, a mid cap, both quitting the UK for the US.

Concerns about the London Stock Exchange have been growing. In 2014, there were 2,460 companies listed on the LSE, while this year there are around 1,700.

In the past year, the Financial Conduct Authority has introduced listing reforms to support the City, while the Capital Markets Industry Taskforce, a lobby group chaired by LSE chief executive Julia Hoggett, has campaigned for softer governance standards, arguing that the UK needs a governance “reset”.

This concern about regulatory demands has been echoed in the Mario Draghi report on the future of Europe and in recent calls for a rethink of the recently-enacted Corporate Sustainability Reporting Directive (CSRD)  .

Shopping around for a listing jurisdiction looks likely to grow. That could place even more pressure on markets like London to prove their worth.