The builders’ merchanting and DIY group announced on Aug 28 that it was reviewing its listing on the Irish Stock Exchange (ISE) with a view to moving its shares to the London market. Following the completion of this review, it has given notice to the ISE that it intends to exit its Dublin listing. Its application for inclusion in the FTSE UK Index Series will begin on Nov 12 and if it meets the requirements, then it would be included in the index series at the close of business on Dec 20.
Consequently from March of next year, all Grafton dividends will be denominated in sterling. It is the latest Irish PLC that has opted to delist in Dublin in favour of London following in the footsteps of DCC, United Drug, Greencore and Icon among others.
Less than 5% of Grafton’s existing shareholder base are Irish institutional investors. Moreover, because many British funds are excluded from investing in stocks that are not listed in London, the move should increase its exposure to a much deeper investment pool.
In response to the move, the ISE said, “The Irish Stock Exchange (ISE) notes Grafton Group’s announcement that it is required to cancel its primary listing on the ISE in order to seek inclusion in the FTSE UK Index Series.
“The ISE rejects any suggestion that trading and listing on the ISE limits a company’s ability to attract international investment. More than 80% of Grafton’s institutional shareholders are located outside Ireland under its current listing arrangements.
This is consistent with international statistics that show ISE-listed companies, on average, have a far higher percentage of foreign investors (67%) than their peers across many European countries, including Britain (40%). Evidence also indicates that Irish companies with a dual listing arrangement have a more diverse international base than companies with a solo listing.
More than 90% of Grafton’s trading currently takes place on the ISE, denominated in euro. As FTSE UK Index Series rules require the majority of trading in a constituent company’s shares to take place in Britain, this change will result in Grafton losing its euro quotation and becoming ineligible for Iseq and Eurostoxx inclusion.
Grafton currently accounts for approximately 2.4% of the Iseq index. The index will be reweighted as appropriate when the company ceases to be a constituent. Source: Irish Examiner