London stock market reforms a big attraction, says first firm to list

Britain’s wide-ranging overhaul of the listing rules has made it more attractive to join the London stock market, a senior executive at the first company to take advantage of the reforms has said.

Andy Hunter, deputy managing director of CK Infrastructure, which is based in Hong Kong and has a market capitalisation of almost £14 billion, told The Times that the new rules were “very welcome” and had made it “more straightforward” for the company to have its shares traded in London.

“It helped quite a lot, it has streamlined the process and streamlined the day-to-day operations of a UK-listed company in regards to the rules and regulations you must comply with,” he said.

Hunter was speaking after CKI, which owns assets ranging from energy and water to waste and transport, joined London’s main market through a secondary listing on Monday, making it the first business to list, excluding reverse takeovers, since the Financial Conduct Authority’s revamp came into force at the end of July.

CKI is part of the business empire of Li Ka-shing, Hong Kong’s richest man. Listed on the main board of The Stock Exchange of Hong Kong, it reported profit attributable to shareholders of £430.2 million in the six months ended June 30.

Hunter’s comments are a fillip for the London exchange, UK regulators and ministers, who are trying to boost the appeal of Britain’s stock market amid fears that it is losing business to other listing venues overseas, particularly New York. Arm, the Cambridge-based microchip designer, last year floated on the Nasdaq exchange in the United States rather than London. Several other big UK-quoted companies have recently switched their main listings from London to New York.

The FCA’s listings shake-up, which is the biggest revamp of the rulebook in more than three decades, aims to reverse this trend by simplifying the market to boost its appeal to companies.

It also raises the risks facing investors, however, by stripping away protections they previously enjoyed and putting greater onus on them to conduct due diligence before buying shares. This has prompted opponents of the changes to warn the overhaul damages the UK’s reputation for high governance standards and could backfire by making Britain a less appealing destination for capital.

Hunter said that CKI had briefly considered a secondary listing elsewhere but had “very quickly landed on London”, not least because it has a big presence in the UK. It first invested here 20 years ago and its portfolio now includes Northumbrian Water, Wales & West Utilities, UK Power Networks and Eversholt, the rail rolling-stock business.

“It just seemed like a natural progression to have a UK listing,” he said. The listing did not involve any fundraising.

In a further boost for Labour after taking power last month, Hunter said that CKI believed “the government will create conditions in the UK that are very conducive to investment”.

Rachel Reeves, the chancellor, is trying to drum up inward investment to turbocharge economic growth. She has visited New York and Toronto to court big investors, including Canada’s giant pension funds and Blackstone, the US investment group.