Looking for a foreign stock market to list your company? Take a page out of Verona Pharma’s books
You’ve started a company. After a few good years, you want to take it public. But you only have a vague idea which market you want to trade your stock on. Unlike companies like ARAMCO (ARMCO), markets are not looking for you. If you have an IPO coming up but you’re still struggling with the decision on where to list, you could learn a thing from these successful IPOs’ choices.
It’s all about your type of product
Depending on where your product is most likely to succeed, proceeds will vary with the market.
In this case, you may want to take a look at Verona Pharmaceuticals (VRNA). Verona Pharma is a UK-based pharmaceutical company that specializes in developing medicines to fight respiratory disorders such as cystic fibrosis and COPD. Most cases of these two diseases are concentrated in the United States and the UK. With this in mind, Verona Pharma filed for listings in both the London and NASDAQ markets realizing probably that a big part of its market will be in the two regions. It would not be reasonable for Verona to list on the Hong Kong stock trade market, now would it?
Performance of your product in the market
How your product performs in a domestic market may indicate that your company is either ready or not ready to move into a foreign exchange market.
Still, in the case of Verona, a successful launch in the London Exchange spurred its desire to list internationally. A weak exchange rate may indicate that you first need an overhaul of your current strategy before moving into an international market. If you cannot pull off good share prices in your country, doing it in another nation may be even harder for you.
Regulations, of course, vary depending on the country you want to operate in. Some nations have a higher tariff for specific industries. In others, you need product approval before you can even list in the market. Before you decide to list in any foreign market, check out to see that the regulations aren’t so stiff that you end up losing millions just trading on them.
Verona Pharma did its homework before going into the US NASDAQ market. The company is in its clinical trials for its primary products at the moment. Being a pharmaceutical product, Verona Pharma’s product would fall under the FDA regulation. Verona Pharma waited for FDA approval before announcing its listing in the US market.That move alone improved the company’s stock prices back in London.
The US at the moment is one of the most favorable for international listings, with companies such as Argenx filing as late as this Friday. President Trump’s policies seem to be conducive for foreign and domestic to thrive if the number of IPO listings in the NASDAQ and NYSE in April are anything to go by. Always look for the most conducive country climates to list in.
Aramco should be taking notes on this as everyone clamors for its IPO business.