Why stock-market tourists flock to New York

But this isn’t just about London. On Wednesday, when Bloomberg reported SoftBank’s latest plan, industrial-gas giant Linde also delisted its shares from the Frankfurt stock exchange. With a market value of $175 billion, the company was the most valuable company in Germany’s Dax index.

Particularly since Brexit, European financial hubs such as London, Amsterdam, Paris and Frankfurt are often framed as rivals. But competition for capital between them may just hand more power to America’s hub. It is a challenging pitch in today’s geopolitical environment, but the best answer for Europe could be cross-border collaboration.

The companies shunning European exchanges have different circumstances. Arm was delisted from the London market when SoftBank bought it in 2016, so the Japanese company can take a blank-sheet approach to relisting it. More than any other, the technology sector is heavily skewed to the U.S., making New York the obvious destination despite Arm’s home in Cambridge, England.

Meanwhile, Linde grew too big for the small German market. The Dax limits individual stocks to a maximum 10% weighting to protect investors from excess portfolio concentration. That means index funds and benchmark-hugging fund managers often sell for technical reasons. Linde found that its stock underperformed in the quarterly periods of index rebalancing whenever its market value strayed above the 10% cap.

It might have put up with the headwind to its share price if it didn’t have an easy alternative. LVMH and Nestlé also face concentration limits on the French and Swiss exchanges, respectively. But Linde is the product of a 2018 “merger of equals” between a German company, Linde, and Praxair, a U.S. peer, so it had a U.S. listing to fall back on. New York already handled almost three-quarters of the trading in its shares.

Construction giant CRH also said Thursday it wanted to move its primary listing from the U.K. to the U.S. Most of its business is in the U.S., and it would like to pursue acquisitions, for which a liquid American stock would be a better currency. The company is run from Dublin, Ireland, where it has a secondary listing.

All three cases share a similar underlying rationale: The U.S. is a much larger single pool of capital, leading to more liquidity and higher valuations. Whereas companies might once have used dual listings to placate different stakeholders, they increasingly need to commit to one. Reporting in two separate jurisdictions is only becoming more onerous, and tracker funds are making inclusion in the right index more important than ever.

The logical response for Europe would be to pool its resources: break down bureaucratic barriers that keep capital in national silos. But that is easier said than done in a highly regulated industry. In a parallel case, the European Union’s project for a banking union is still far from complete, all but ruling out cross-border bank mergers that might allow the region’s lenders to compete better with the likes of JPMorgan. And many of Europe’s largest companies are based outside the EU in Switzerland and the U.K.

Most big listed European companies are too rooted to consider moving their stock. Among those about to go public and those that already have deep American links, though, the exodus seems likely to continue.

Write to Stephen Wilmot at stephen.wilmot@wsj.com