THE SERIES | DUAL-LISTING – A WORTHWHILE DIRECTION TO TAKE
From the perspective of a Polish company, dual listing means simultaneous presence on both the Warsaw Stock Exchange and a foreign exchange. With dual listing, additional capital can be raised from international investors and serve to boost the price of shares listed on the Polish stock exchange.
Advantages of dual listing
The listing of a company on a foreign stock exchange, in particular on the London Stock Exchange, opens the door to its wider recognition on international markets, providing access to the most active investors and financial institutions. This can lead to an increase in liquidity, which in turn allows the company to significantly expand its existing business.
Increased liquidity means not only an increase in the capital available to the company, but also more intensive trading in its shares. Being present on two stock exchanges at the same time means that more purchase and sale transactions in the company’s shares can be made during each trading session than would be possible on a single trading floor.
Conducting a dual listing requires adequate preparation and involves experienced advisers. It also entails costs, which, however, should pay off several times over once the company has entered the foreign market.
Pre-IPO
Companies that are thinking of listing abroad are not always completely ready, for example due to insufficient capitalisation and weak financial buoyancy. Some therefore may need to raise capital outside the stock market from individual investors, which is referred to as pre-IPO. Obtaining external financing may not however be as difficult as expected, as a company’s planned dual listing can make it more attractive in the eyes of investors.
The two stages are closely linked, i.e. the pre-IPO enables the subsequent dual listing.
The London Stock Exchange – an attractive trading floor for Polish companies planning a dual listing
The advantages of listing abroad cannot be overestimated. Returns depend on a number of factors, with the most important being the choice of stock exchange.
Given the amount of capital available, the London Stock Exchange (LSE) seems a natural choice.
Companies listed on the LSE meet high standards of corporate governance and transparent communication of information, which are strongly sought after by international investors.
As far as Polish companies are concerned, it is important to remember that there are also other proven ways to raise capital, both European and non-European.
How do we help
We have been advising Clients on dual listings for many years. We pioneered this type of venture on the Polish market, with WorkService SA being the first Polish company to list on the LSE and paving the way for others.
Nowadays, at a time when the Polish stock market does not always provide sufficient liquidity, it is worth seriously considering listing on a foreign exchange.
Questions? Contact the author