Key facts
- Up to 20 FTSE 100 companies may move their primary listings to New York.
- AstraZeneca's "upgrade" of its US listing is cited as a catalyst for this potential flight.
- The London Stock Exchange estimates a £2 billion loss in Treasury earnings from stamp duty if these companies relocate.
- Companies like HSBC, BT, Vodafone, Diageo, BP, Shell, Pearson, and Relx are identified as being at risk.
- Abolishing stamp duty on UK shares is proposed as a measure to retain listings.
The London Stock Exchange (LSE) has drawn up contingency plans for a scenario where as many as 20 FTSE 100 companies could shift their primary listings to New York. This potential exodus is seen as a fallout from AstraZeneca's decision to upgrade its US listing to a direct share offering on the New York Stock Exchange, a move aimed at accessing a broader capital pool and harmonizing trading across global venues.
The LSE's analysis suggests this shift could result in a £2 billion gap in the UK Treasury's earnings from stamp duty on share trades. Companies like HSBC, BT, Vodafone, Diageo, BP, Shell, Pearson, and Relx are identified as being at risk of following AstraZeneca's lead.
According to the LSE, AstraZeneca's move has already cost the Treasury an estimated £200 million in stamp duty, and fears remain that the company might permanently relocate its trading activities to the US. Investment bank Peel Hunt noted a "clear risk" to stamp duty earnings if more large companies harmonize their listings abroad. Charles Hall, head of investment at Peel Hunt, suggested that removing stamp duty could reduce the incentive for companies to relocate.
Further supporting the call for reform, a poll by investment platform Interactive Investor found that three-quarters of investors would be more inclined to invest in UK shares and trusts if stamp duty were abolished. This comes after AstraZeneca's surprise U-turn in April, where it committed £300 million to its UK operations, including investments in a Cambridge megalab and a Macclesfield site, despite a prior dispute with the UK government over drug pricing.