# Cross listing question with example

I would like to ask how it is possible that the company traded on two different exchanges has a totally different stock price.

For example: Avast Plc (AVST.L) on London Exchange and Avast Plc (AVST.PR) on Prague exchange? With today share prices 295 GBp on London and 85.5 CZK on Prague exchange which is around 3 GBp.

Thank you for your time.

• It is 2.95 GBP that is close to 3.00; normal fluctuations in price Jan 13, 2019 at 13:41
• @Dheer: Two Hundred Ninety Five is not close to Two and Ninety-Five Hundredths. Jan 14, 2019 at 6:01
• @BenVoigt Brits are funny people. :) While GBP with a capital P is pounds; GBp with small p is Pence. The stock market quotes in Pence and fraction of Pence. Final settlement is rounded off to Pence Jan 14, 2019 at 15:34
• @Dheer: And there's the answer (but D Stanley already posted it) Jan 14, 2019 at 15:37

GBp is a common notation for pence sterling (1/100 of a Pound). The current CZK to GBP (pound) exchange rate is about 28.65, so 85.5 CZK is about 2.98 GBP (pounds), or about 298 GBp (pence) which is much close to the 295 quote in London. The difference is not unusual for cross-listed stocks, especially in different currencies.

• Which of the two currencies (pounds or pence) is the Market Cap stated in? A quick calculation on how much of the market cap is in a single share comes out quite different between the two exchanges -- unless the share price and market cap are using inconsistent units on the Yahoo page for the London listing. Jan 14, 2019 at 15:40
• @BenVoigt Market Cap appears to be in GBP on the London exchange and CZX on the Chech exchange. It's not identical using current exchange rates but it's close (within an order of magnitude at least). Jan 14, 2019 at 15:45
• That explains things. Pretty poor decision by Yahoo to state that "currency in GBp" and then use a mixture of pence and pounds throughout the page, with no further units. Jan 14, 2019 at 16:45

When comparing the price of a share on two different exchanges, you must compare the respective bid and asked price of each security at the same moment in time during the regular hours of trading. Closing prices may not be accurate because the last trade could be at or before the close.

Also, in your two links, there's a 12 minute discrepancy in the time and that may also be a factor contributing to the differential.

• He's asking about the factor of one hundred between the two. Obviously they represent different fractions of the company. Jan 14, 2019 at 6:03

A useful test for any discrepancy in price is: Does the price difference create an arbitrage opportunity ?

In this case, the trade would be selling the UK listed security (short), converting the pounds received to CZK, and buying the Prague listed security. If you can do that and make a profit, then there is indeed a price discrepancy.

What you may find however is there are hidden costs or unexpected situations that make such activity unprofitable (e.g. transaction fees, system delays on prices).

While arbitrage opportunities can come up from time to time, they are rare, and usually taken advantage of by larger firms can execute transactions with lower transaction costs on a more automated basis. e.g. executing 100,000 such transactions per day for \$0.01 profit each time would be an effective strategy.

As a result, it usually means that an assumption about the discrepancy is incorrect, and there is in fact no discrepancy.