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Glencore ( GLCNF ) to keep primary listing in London for now

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Company doesn't think it would have been included in S&P

500

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Decision a boost for London after several companies left

By Charlie Conchie and Pratima Desai

LONDON, Aug 6 (Reuters) - Glencore ( GLCNF ) will keep

its primary listing in London, rejecting a move to the United

States for now in a rare win for the city's markets, which have

been shrinking due to a dearth of new share issues.

The London-listed miner said on Wednesday that a move across

the Atlantic would not increase value for shareholders. In

February, it said it might switch its main listing from London,

and CEO Gary Nagle said New York was being considered.

Nagle said on Wednesday that the company had extensively

researched a move to the major exchanges around the world.

"A move in our primary listing ... would not be value

accretive for Glencore ( GLCNF ) at this stage, having done that thorough

analysis, and therefore we keep it on a watching brief, but will

remain listed in London for the moment," he said.

The decision is a boost for UK capital markets after years

of few initial public offerings and depressed valuations leading

to a string of takeovers of public companies. That has led

London's equity markets to shrink as some companies seek higher

valuations elsewhere, prompting a suite of listing reforms.

High-profile companies to recently announce their departure

from London include travel giant TUI and

Netherlands-based food delivery company Just Eat Takeaway.com

. BHP Group ( BHP ), the world's largest miner, also

ended its dual listing in favour of Sydney in 2022.

Britain's reforms to try to attract more companies include

reducing shareholder votes on certain transactions, and easing

the prospectus requirements for companies listing shares.

Asked about Glencore's ( GLCNF ) decision, Antonio Simoes, CEO at

Britain's largest investor Legal & General ( LGGNF ), said he saw

pent-up demand to invest in Britain from international clients,

including in London-listed companies, but that the government

needed to press ahead with reforms to boost economic growth.

"The more we get the country growing, the stock market will

be a reflection of that," he said. "We just want to see those

reforms coming through, so that there's more capital investing

in the UK."

Some companies could still shift London listings, including

publisher Pearson, which is under shareholder pressure

to do so, and oil major Shell, which is considering a

move to the U.S. to address a valuation gap with rivals there.

Glencore's ( GLCNF ) shares have fallen 26% in the last year,

prompting analysts to suggest the company might get a boost by a

relisting in New York. However, Nagle said on Wednesday that

decline was due at least in part to lower coal prices

He added that the company believed it was unlikely to have

been included in U.S. benchmark S&P 500 index - a point that

London and other European exchanges have stressed in their

campaigns to try to convince companies to list with them.

"A U.S. listing is perceived to offer access to deeper pools

of capital and higher valuations in certain sectors but these

are often illusory, and it also comes with significant

regulatory burden, litigation risk, and increased disclosure

requirements as well as big challenges in gaining index

inclusion," said Michael Jacobs, corporate partner at law firm

Herbert Smith Freehills Kramer.

Still, some investors were disappointed with Glencore's ( GLCNF )

decision, with some analysts citing it as a reason for a 4% drop

in its shares on Wednesday.