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AstraZeneca is to launch a direct listing on the New York stock exchange in a blow to the City that will raise fears that it may eventually abandon the London market. The move beefs up the £170billion pharma group’s presence in the US, in a move designed to help it ‘reach a broader mix of global investors’.
The FTSE 100 Anglo-Swedish giant – a jewel in the crown of the UK market where it is second in value only to HSBC – will retain its primary listing in London, where it will remain headquartered and pay taxes. And the London Stock Exchange issued a statement saying there was no change to Astra’s ‘continued commitment to the UK, our capital markets and their important place as a key constituent of the FTSE 100’.
But the move will stoke anxiety that with Astra’s eyes on the world’s biggest capital markets in America, London could become sidelined. And while the UK remains the group’s primary listing venue for now, it is likely to be seen as a step towards Astra eventually following the likes of gambling giant Flutter and equipment hire firm Ashtead in going across the Atlantic. One well-placed source said that they ‘cannot speculate about what might happen in the future’.
A full-scale listing move to New York would be a huge blow to Labour’s claim to be prioritising growth, as it holds its annual conference in Liverpool, where earlier this year Astra scrapped plans for a £450million expansion blaming lack of Government support. Until now, Astra has traded in the US through so-called American depositary receipts (ADRs) on the Nasdaq. But ordinary shares are typically easier to trade than ADRs. Investors will now be able to trade them in New York as well as in London and Stockholm.
Neil Wilson, UK investor strategist at trading platform Saxo Markets, said: ‘It’s being billed as a simplification of its listing structure and will undoubtedly improve liquidity, but it’s also a bit of a knock-back for London. It reflects the fundamental, structural issues in the UK for the largest globally-oriented stocks – the depth and liquidity of its capital markets is falling short of what’s on offer across the pond.’
The announcement comes after reports that boss Pascal Soriot is privately supportive of a move to the US. Astra has recently announced tens of billions in investment in the country, and is seeking to insulate itself from the impact of President Donald Trump’s tariffs.
The US is the company’s biggest market representing more than 40 per cent of its revenues. At the same time, Astra and other pharma firms have fallen out with the Government over a drug pricing regime, which forces them to pay back as much as 23 per cent of revenues from new medicines to the NHS. Russ Mould, investment director at AJ Bell, said while there was no suggestion that Astra would imminently move its primary listing from London ‘there may be some nervousness around the risk that the UK market might lose one of its largest constituents’.
Mark Kelly, chief executive of corporate advisory firm MKP Advisors, was quoted as saying: ‘This is a halfway house, it’s potentially a backdoor route to an eventual full US listing.’ Astra shares yesterday added 0.9 per cent, or 88p, to 11088p.
