Tomorrow marks CRH’s last day on the Irish Stock Exchange. Long the most valuable company on the Irish market, the building materials giant is leaving and will make its US stock market debut next Monday.
CRH is one of many leaving the Irish market, with 21 companies having departed over the last five years. Over the same period, just five have joined.
Smurfit Kappa will soon be the 22nd company to leave, while many expect Paddy Power owner Flutter to follow suit sooner rather than later. Other potential leavers, the Department of Finance noted in a recent report, include food companies Kerry and Glanbia as well as building materials group Kingspan.
Understandably concerned, Euronext Dublin has called on the Government to scrap the 1 per cent stamp duty paid when buying shares in Ireland, saying it badly disadvantages the Irish market compared with jurisdictions like Britain and the US.
Scrapping stamp duty will hardly stem the tide, however. The simple reality is companies “want to gravitate towards a market that has much more liquidity and higher ratings”, as Smurfit Kappa boss Tony Smurfit put it last week.
Much research confirms this point about higher valuations. A 2015 Federal Reserve paper found companies cross-listing in a more “prestigious” market enjoy “significant valuation gains” over the following five-year period.
Separate research shows companies tend to significantly outperform in the year before listing. CRH shares, up 34 per cent in 2023, are following this pattern. Little wonder the US market is tempting away Irish companies.
