Investigation on how Brexit has impacted IPO listings with Deutsche Börse and the London Stock Exchange
Tuominen, Dennis Richard (2020)
2020
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2020121127607
https://urn.fi/URN:NBN:fi:amk-2020121127607
Tiivistelmä
This qualitative study, which was conducted as semi-structured interviews, studies the impact of Brexit on IPO listings in London and Frankfurt.
The study addresses the main research question: “How an uncertainty due to Brexit causes a shift in IPO trends between the London Stock Exchange and Deutsche Börse?”
The purpose of this thesis was to explore the factors and challenges of Brexit implications on IPO trends between the two stock exchanges LSE and DB.
The study was conducted between a total of 5 IPO experts from Britain and Germany. The aim was to examine whether there are reasons for companies to follow a certain listing pattern in times of uncertainty.
The research question follows the aim of the thesis. Uncertainty over Brexit is among the risk factors to possibly shift IPO trends. The literature review consists of themes that are closely connected to the IPO decision making, pre-IPO considerations, and Brexit.
There are differences between investing culture, ecosystem, and knowledge base in Germany and the UK. The importance of strategy considerations, preferences, costs of IPO, and valuation are core pre-IPO indicators.
The author has discussed the possible outcome of the post Brexit environment with various experts. The thesis measures the data available from LSE, DB, EY, PwC, and KPMG IPO reports.
Finally, this paper explores the extent of the uncertainty of Brexit in a more direct manner by relating the number of listings and deal value on researched stock exchanges.
Consistent with the interviews, the author’s empirical results suggest that a drastic change in IPO trends between LSE and DB was not found. In addition, the research revealed that home listing bias plays an important role in the limited cross border listing trend.
Further research on the topic is needed and it is recommended to use up-to-date data after Brexit is fully executed in 2021. Due to Brexit being a relatively new issue and lack of research, definite conclusions are avoided in this thesis. The author gives suggestions for future research on IPO trends correlation with Brexit.
The study addresses the main research question: “How an uncertainty due to Brexit causes a shift in IPO trends between the London Stock Exchange and Deutsche Börse?”
The purpose of this thesis was to explore the factors and challenges of Brexit implications on IPO trends between the two stock exchanges LSE and DB.
The study was conducted between a total of 5 IPO experts from Britain and Germany. The aim was to examine whether there are reasons for companies to follow a certain listing pattern in times of uncertainty.
The research question follows the aim of the thesis. Uncertainty over Brexit is among the risk factors to possibly shift IPO trends. The literature review consists of themes that are closely connected to the IPO decision making, pre-IPO considerations, and Brexit.
There are differences between investing culture, ecosystem, and knowledge base in Germany and the UK. The importance of strategy considerations, preferences, costs of IPO, and valuation are core pre-IPO indicators.
The author has discussed the possible outcome of the post Brexit environment with various experts. The thesis measures the data available from LSE, DB, EY, PwC, and KPMG IPO reports.
Finally, this paper explores the extent of the uncertainty of Brexit in a more direct manner by relating the number of listings and deal value on researched stock exchanges.
Consistent with the interviews, the author’s empirical results suggest that a drastic change in IPO trends between LSE and DB was not found. In addition, the research revealed that home listing bias plays an important role in the limited cross border listing trend.
Further research on the topic is needed and it is recommended to use up-to-date data after Brexit is fully executed in 2021. Due to Brexit being a relatively new issue and lack of research, definite conclusions are avoided in this thesis. The author gives suggestions for future research on IPO trends correlation with Brexit.