Foreign Listings

Abstract

Today, the financial markets around the world are linked more to each other than ever before. The thesis studies Swedish companies entering the international arena through secondary listings, as well as investigating what regulatory requirements exist in the selected stock markets, and what main differences exist between these international markets' regulations. The study is limited to companies who had their secondary listing on the New York Stock Exchange, the Nasdaq market and the London Stock Exchange. The thesis is conducted on a micro level, focusing on company specific factors influencing foreign secondary listings, and both a descriptive and an exploratory research approach are used. The phenomenon of foreign secondary listing is analysed from the point of view of the companies who executed the listings, and not from an investor's perspective. The stated motives for the secondary listings are capital motives, valuation motives, owner related motives, to diversify shareholder base, to increase visibility and reputation and to enable employees not employed in the country of origin to invest in the parent company. Also, to make the stock liquid in another country, to make it easier to get qualified employees, to have the possibility to use foreign stocks in foreign acquisitions or a strict internationalisation phase in the company are motives of importance. In this study conducted it has been realised that the motives stated in the thesis from a theoretical perspective are also valid in practice. It has been observed that it is hard when discussing secondary listings to identify and generalise one single motive for all companies, however the thesis has identified four motives that the companies interviewed have agreed are the most relevant ones, i.e. the valuation motive, to diversify shareholder base, to make the share liquid in the foreign country and to increase visibility and reputation, with no internal order.