Glencore Considers Primary Listing Shift to New York
Deutsche Bank analysts have forecasted that Glencore, a UK-based copper mining and trading company, may contemplate relocating its primary listing from London to New York, potentially marking one of the most notable departures from the UK exchange.
According to Liam Fitzpatrick and his team, the consideration for Glencore’s primary listing shift arises from a perceived lack of shareholder support for its proposed plan to separate and list its coal business independently in New York.
They highlighted that the US market demonstrates greater support for companies involved in fossil fuels compared to many European markets, where such companies are often excluded from investment portfolios.
Additionally, the analysts noted that US-listed copper stocks command significant premiums compared to their UK counterparts.
“Given the valuation disparities and concerns over coal exclusion in the UK, a transition to a US listing could become a viable option for Glencore,” the analysts remarked.
“While we hope the UK remains a prominent hub for mining investments, persisting valuation differentials may justify a listing relocation.”
Glencore declined to comment on the speculation.
The company’s recent acquisition of a majority stake in Teck Resources’ coal business indicates its growing involvement in the sector, with plans to integrate the coal operations into a new entity listed on the New York Stock Exchange within the next two years.
Amidst dwindling trading volumes, the London Stock Exchange witnessed companies raising a mere $1 billion in 2023, the lowest since 2009.
The failure to secure listings for significant entities like Arm Holdings, a leading UK technology firm, has underscored London’s declining appeal.
The substantial discount of the MSCI UK share index compared to its US counterpart, as evidenced by forward price-to-earnings ratios, further enhances the attractiveness of New York as a listing destination over London.
Deutsche Bank analysts pointed out recent instances of European companies shifting their primary listings to the US, including CRH, Linde, and Ferguson, although acknowledging that Glencore has less exposure to the US market.
In 2022, competitor BHP Group transitioned its main listing to Sydney, ending its dual arrangement with London, as the majority of BHP shares were already traded in Australia.
Bloomberg News has reached out to the London Stock Exchange Group for comment on the matter.
