This gives issuing companies more liquidity and a greater ability to raise capital. Also, some companies may perceive a higher corporate standing of having its shares listed on two or more exchanges. This can be particularly true for foreign companies that cross-list in the U. Those who gain listings in the U.
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The value of cross-listed stocks. But cross-listings, despite their benefits, may not be all that important to what matters most to investors: In doing so, researchers noted many of the benefits that are associated with cross-listed stocks.
For example, Canadian firms listed on the New York Stock Exchange should have a lower cost of capital, which together with increased growth opportunities, decreasing agency costs and an improvement in their ability to take advantage of growth opportunities, helps explain why foreign companies listed in the U.
Such stocks also experience a strong increase in visibility, as estimated by news coverage and analyst following.
Moreover, Canadian stocks also listed south of border generally see an increase in trading volume and liquidity. This latter point differs from several other studies over the years that have shown cross-listings more often than not represent a losing proposition for investors in the long run.-Disadvantages: o Costs – Includes direct one-time costs such as registration, then ongoing costs related to reporting and disclosure requirements.
o Relative costs – Cross-listing in the U.S reduce the controlling shareholder’s power, so may be costly%(11). -Disadvantages: o Costs – Includes direct one-time costs such as registration, then ongoing costs related to reporting and disclosure requirements.
o Relative costs – Cross-listing in the U.S reduce the controlling shareholder’s power, so may be costly%(11).
Benefits of International Cross-Listing and Effectiveness of Bonding The paper examines the long term impact of the first significant deregulation of U.S. disclosure requirements since on cross-listed foreign companies. Ideally all DLCs are cross-border, and have tax advantages for the corporations and their stockholders.” The South African government had demanded dual listing of MTN in order to protect the character of MTN as a South African entity.
The Advantages And Disadvantges Of Cross Border Listings Process of Lenovo and IBM Cross - Border Mergers and Acquisitions Cross - border mergers and acquisitions are very complex investment activities. Firms may adopt cross-border listing to obtain advantages that include lower cost of capital, expanded global shareholder base, greater liquidity in the trading of shares, prestige and publicity.