The Paris Stock Exchange boasts of having surpassed London and of having become the first European stock market in terms of capitalization on its own merits but also because of the effect of Brexit, which has made the square of the British capital less attractive.
“While the UK was separating from Europe, we created a kind of ‘Schengen of capital markets’,” stresses Stéphane Boujnah, the CEO ofEuronext (EPA:ENX), the company that manages the Paris Stock Exchange, but also those of Amsterdam, Brussels, Lisbon, Dublin, Oslo and Milan.
In an interview published this Sunday by Le Journal du Dimanche, Boujnah refers to the fact that, according to Bloomberg, the market capitalization of Euronext Paris is now higher than that of the London Stock Exchange.
Specifically, according to figures from the financial information agency in the middle of the month, the French market was worth 2,823 billion dollars, slightly above the 2,821 billion in London.
It should be borne in mind that when in 2016 the British pronounced themselves in favor of leaving the European Union, the shares listed in London had a value that exceeded those of the Paris Stock Exchange by 1.5 trillion.
Since then, says Boujnah, “some companies have decided to leave London to list on Euronext, such as Ryanair (LON:RYA). Others that have gone public in recent years have chosen to do so on this side of the English Channel, which perhaps they would not have done without the United Kingdom’s exit from the European Union.”
“It is the negative effect of Brexit: London’s attractiveness as a natural location for European and international companies has weakened. But other factors have also weighed.”
Specifically, the executive head of Euronext notes that Paris benefits from the fact that large multinationals are concentrated there whose valuation “has increased significantly in recent years”, particularly in the luxury sector (LVMH (EPA:LVMH), Kering (EPA:PRTP), Hermès (EPA:HRMS) and L’Oréal), but also in energy (Engie (EPA:ENGIE)) or banking (BNP Paribas(EPA:BNPP), Société Générale (EPA:SOGN), Crédit Agricole (EPA:CAGR)).
It also refers to the 30% increase in the weight of medium-sized companies since 2020 and the effect of the new dimension that Euronext has acquired with four successive acquisitions in four years: the Dublin, Oslo and Milan stock exchanges, and the central depository in Copenhagen.
The daily trading volume of all Euronext markets is close to 13 billion euros, compared to 6 billion in London, Boujnah said.
To make matters worse, the UK’s short- and medium-term economic prospects are even worse than in France. In its half-yearly Outlook report published last Tuesday, the OECD forecast growth of 0.6% in France in 2023 and a fall of 0.4% in the United Kingdom.
