London loses listing, analysts cautious about UK

TUI’s Share Listing Move Shows London Loses Its Appeal

TUI, the German travel giant, has decided to ditch its share listing in London, favoring a sole listing in Frankfurt instead. The move comes as a result of shareholders voting overwhelmingly for the German headquarters to move its shares traded on the London Stock Exchange’s FTSE 250 to Frankfurt’s MDAX, expected to take place on June 24.

According to the company’s Chief Financial Officer, Mathias Kiep, the decision to transition to Frankfurt was a result of shareholder inquiries and a significant shift in liquidity from the U.K. to Germany. Currently, around 77% of TUI’s transactions are settled in Germany, while the U.K. accounts for less than a quarter of its trading volume.

The decision to move the listing to Frankfurt was also influenced by comments from shareholders, highlighting the benefits of having liquidity in one pool and a more prominent position in the MDAX compared to the FTSE 250. Additionally, the challenges posed by the U.K. market environment were also taken into consideration.

This move reflects a broader trend of U.K. stocks trading at a discount compared to the rest of Europe. The FTSE 100 index is down almost 5% over the past year, while the pan-European Stoxx 600 has seen a 5% increase during the same period.

London has experienced several de-listings and high-profile IPO snubs in the past year, resulting in a decline in applications to list in the Square Mile. Companies, including the British semiconductor and software design firm Arm, have opted to list on exchanges outside of London, with Arm choosing to list on Nasdaq in New York.

While the decision to move TUI’s listing to Frankfurt may be disappointing for the London Stock Exchange, it’s important to consider the specific factors that led to this decision. TUI’s move is related to the company’s structure and the shift in trading volumes, rather than being indicative of a broader trend away from London as a financial hub.

It’s worth noting that, despite recent challenges, London still remains the largest exchange in Europe and has shown better activity compared to other European exchanges in 2023.

Overall, TUI’s decision to move its listing from London to Frankfurt reflects the shifting dynamics of the European financial landscape. While the move may raise concerns about London’s appeal as a financial center, it’s important to consider the unique factors influencing individual company decisions. London remains a significant player in the financial market, and its resilience will be crucial in shaping its future as a global financial hub.

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