Quiver Quantitative - The relocation of CRH (LON:CRH) primary listing from London to the New York Stock Exchange has not only buoyed its stock by 20% in British pound terms but also attracted significant hedge fund interest. In the third quarter, filings reveal a substantial influx of over 72 million US-listed CRH shares into hedge fund portfolios, making it one of the most significant single-stock position increases for this period. Notable funds like Baupost Group, Millennium and Balyasny Asset Management capitalized on the company's move, augmenting their stakes considerably.
CRH's shift is part of a broader trend, with European companies seeking the lucrative and capacious American markets for enhanced valuation and capital access. The company's successful listing in New York may lead to strategic contemplations among its European counterparts regarding their listing venues. Flutter Entertainment recent announcement to list on the NYSE, primarily to elevate its standing in a key market, underscores this trend. Moreover, activist firms such as Cevian Capital are prioritizing listing location arbitrage as a criterion in their investment decisions, highlighting the significance of primary listing venues in the current financial landscape.
The optimism surrounding CRH is buoyed by the potential operational benefits of a US listing, including streamlined M&A activities as indicated by CEO Albert Manifold. Analysts are speculating that CRH's new listing could pave the way for its inclusion in major indices like the S&P (SPY (NYSE:SPY)) and Russell (RUT), events that could further elevate its market position as soon as the first half of the next year, according to Citigroup (C).
CRH's strategic move has clearly resonated with hedge funds, with a net purchase of 72 million shares, including the conversions from ADRs following the NYSE debut. Despite the diverse reactions from investors, with a few reducing or exiting positions, a dominant majority increased their holdings, marking a solid vote of confidence in CRH’s prospects following its transition to the US market.
This article was originally published on Quiver Quantitative