Hidroelectrica and OMV Petrom should keep their plans and list at the London Stock Exchange in spite of the Brexit, says Greg Konieczny, Executive Vice President of Franklin Templeton Emerging Markets Group and Fund Manager of Fondul Proprietatea.
“We maintain our strong support for listings on the London Stock Exchange, including the upcoming secondary listings of Hidroelectrica and OMV Petrom. We are confident that London will keep its position of preeminent international market for issuers and investors on the long term and there are strong reasons to believe that London’s Stock Exchange will remain a globally important hub, regardless of the final terms of the UK’s withdrawal from the EU,” says Konieczny Following the vote regarding UK’s exit from EU.
The main arguments are that on LSE are listed over 500 international companies, with a combined market capitalisation of over $3.5 trillion, while it provides multiple market segments to suit companies of every size, sector and stage of development.
Also, London offers unique access to international investors (53% from UK, 29% from US and 15% from Europe) and is the leading IPO market in 2015, with 93 initial public offerings raising £13.4 billion.
This year has remained busy, with 36 IPOs amounting to £2.6 billion since the beginning of the year. The average price performance post IPO to date is +11%, while over two thirds of these transactions are still above the initial price.
And internationally- focused funds with over $2 trillion assets under management are based in London, more than in any other city in the world.
He explains that Fondul Proprietatea’s achievements following its secondary listing in April 2015 speak in terms of the benefits of listing local companies on the London Stock Exchange.
”One year after listing on LSE, the Fund’s international institutional investor base has increased, there is broader research coverage from a larger number of international brokers, while Fondul Proprietatea and Romania became more visible among international investors,” he says.
The GDR facility of one third of the outstanding shares has quickly reached its full capacity, showing the high interest of investors, and the percentage held by foreign institutional investors has grown from 53% to more than 60% in the total share capital of the Fund.
”Many of these investors have also become active investors in other Romanian companies, and should be key participants in the future IPOs from Romania. Moreover, the GDRs are currently traded at a 2.5% premium in London compared with the share price in Bucharest.”