Stock exchange denies that CRH's London switch comes as big blow
The Irish Stock Exchange has downplayed suggestions that its been dealt a big blow after its biggest quoted member, CRH, said it's shifting its primary listing to London's FTSE to increase its exposure to international institutional investors.
The Dublin-based building- materials giant, which has a market capitalisation of €9.3bn, is the single biggest component of the ISEQ, with a 23pc weighting.
Its chief executive, Myles Lee, said yesterday that from December 6, CRH shares will be reclassified from being primary listed to being secondary listed on the Irish Stock Exchange's main securities market.
The company is also expected to join the prestigious FTSE-100 index on December 19. From tomorrow, euro-denominated shares listed in London will be quoted in sterling.
Mr Lee said the move is in the "best long-term interests" of the company and will increase its attractiveness to a wider international investor base.
He added the change is a "logical progression" given the international nature of CRH's business and the fact that the majority of trading in its stock already takes place in London.
A quoted company must have its primary listing on the London Stock Exchange in order to qualify for membership of the FTSE-100. About 55pc of CRH's stock is traded on London and about 20pc in Dublin.
The company's stock will continue to be denominated in euro in Dublin and will still be traded there, but the listing will be downgraded to a secondary one.
Speaking to the Irish Independent, Mr Lee said that a Dublin listing remains important due to the number of retail investors here, but added a primary listing in London will raise the group's profile.
"We've been listed in London for over 30 years and have a strong following there," he said. "But there is a growing number of investment funds that are purely index-based and this exposes us to them."
He said it wasn't necessarily the case that a Dublin listing would eventually be surplus to requirements.
While the move undeniably dents the prestige of the Irish Stock Exchange, which is owned by its member firms, a spokeswoman dismissed suggestions that the downgrading of CRH's listing in Dublin was a blow.
She said that the shares would still be traded here and that opportunities would also exist for dealers to engage in arbitrage -- where they exploit tiny differences in share prices of a company's various stock market listings. CRH also has a listing in New York.
She argued that the removal of euro trading in the stock from London could also result in Dublin experiencing increased euro-denominated trades in CRH.
CRH also said yesterday that its full-year profitability will be flat at €1.6bn. That's about 5pc behind analyst expectations.
The company had a somewhat mixed performance across its territories and business segments in the third quarter. Mr Lee said that clarity is urgently needed around the European debt crisis as it's weighing negatively on sentiment.