The total market capitalisation of Iseq 20 is now just over €100 billion, having shrunk dramatically in the past six months following the exits of the two largest groups on the market – CRH and Flutter Entertainment. Illustration: Paul Scottchief executive Kelly Martin after overseeing the pharma group’s $8.6 billion sale to US peer Perrigo in 2013, floated on the Irish stock market nine years ago with great hopes.
Since late 2021, Malin has returned €236 million of cash to shareholders as it has sold down investments – including stakes Immunocore, which is focused on developing cancer treatments, and eczema-targeting Kymab. It values its remaining portfolio at €124 million. Between them, CRH and Flutter have a market capitalisation equivalent to about €85 billion, with each having increased in value since they took on listings on Wall Street, where stocks typically trade at a premium to European shares, relative to earnings.
“Wall Street is acting like a magnet for companies that believe they’ll be rewarded more for listing there. Whether that’s an illusion or not remains to be seen.” It would also include fuel-to-technology supplying conglomerate DCC and Woodie’s and Chadwicks owner Grafton Group, both of which are listed in London.
The more recent shrinking of the Irish market, however, is more a reflection of a crisis at the London Stock Exchange. The number of listed companies in London has shrunk by more than 25 per cent over the past 10 years, according to research from trading platform XTB. This has been driven by private equity-fuelled buyouts of public companies and the growing attraction, particularly in the wake of Brexit, of the US and other markets.
While there had been speculation that Swedish buy-now-pay-later group Klarna was gearing towards a London IPO after it set up a UK holding company in November, its chief executive Sebastian Siemiatkowski has since indicated that a US flotation was more likely. UK pollster YouGov has also threatened to shift its listing from London to New York.
Dublin and London have company in their misery. In the past six months, the likes of Finnish sports-brand group Amer Sports, which owns Wilson tennis racquets and Salomon skis, and German sandal maker Birkenstock also listed in New York.To make matters worse, flotations in Dublin have been few and far between in recent times.
However, a triple whammy since then of Irish pension funds being pressed by advisory firms to lower their exposure to Irish equities, foreign takeovers of the main local players and a general shift by the industry from active stock-picking to passive investment – where funds track stock market benchmarks – has all but killed off this old port of call.
The Grant Thornton report said a domestic exchange was “critical to supporting local enterprise”. Companies listed on the Irish exchange contributed €12.4 billion to the domestic economy in 2022 and employed or supported almost 90,000 jobs across the State, it said.
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