Transcript Document

The world’s capital market
Listing in London
Santiago
12th June 2008
Global platform for global
institutional investors
Local market
Regional funds
and retail investors
USA
Middle East
Asia
Eastern Europe
Europe
UK
Global
institutional
investor base
2
144A
US
Institutional
Investors
London Stock Exchange
London Stock Exchange - key statistics
Total companies
Domestic: 2,550
International: 675
Market capitalisation
Main Market:
UK listed: US$3,570bn
International listed: US$4,398bn
AIM: US$181bn
Turnover value (Jan-Dec 2007)
Main Market: US$8,054bn
AIM: US$150bn
Source: London Stock Exchange statistics – December 2007
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More international equity assets under
management
7000
6000
Equity assets under management
by centre.
5000
In US$ billions
4000
International
Domestic
3000
2000
1000
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London has a far bigger international presence and weight. 45% of equity assets under
management are invested in international markets.
New York is a larger but mainly domestic market.
Source: IPREO 2007
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The platform of choice for international
companies
450
London Stock Exchange
Nasdaq
NYSE
400
350
300
250
200
150
100
Q1, 2008
50
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
In 2006:
London Stock Exchange - 367 new companies joined in 2006. NYSE, Nasdaq & Hong Kong Stock Exchange had 332 IPOs in 2006.
$104bn raised on the London Stock Exchange, $40bn on NYSE, and $29bn on Nasdaq
In 2007:
London Stock Exchange - 252 new companies joined the London Stock Exchange, 142 new companies on Nasdaq, 67 on NYSE
$88bn raised on the London Stock Exchange.
Source: London Stock Exchange and WFE – December 2007
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General Market Summary
Leader in cumulative capital raised at IPO
Investment Flows - Cumulative Total Funds Raised ($US million) since Jan 2005 by Shares at
Initial Public Offering (IPO), Comparing Various Exchanges.
Source: World Federation of Exchanges
$140,000
$130,000
$120,000
$110,000
$100,000
NASDAQ
$90,000
NYSE
$80,000
London Stock Exchange
$70,000
Hong Kong Stock Exchanges
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
Source: London Stock Exchange and WFE – December 2007
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$US million - cumulative total
London Stock Exchange
Comparing UK and US as listing locations
Profile
 London and New York exchanges offer optimal profile
 London has world’s highest reputation for regulation and governance
 Principles-based (UK) versus rule-based (US) approach
Trading
 London has the most liquid equity market in Europe
 London has the world’s most successful growth market (AIM)
 London Stock Exchange offers world’s only location for liquid and
transparent trading of GDRs
Disclosure
Timing
 London combines simple, flexible disclosure with high reputation of
regulators
 US disclosure regime more prescriptive, exacerbated by need to
protect against opportunistic securities litigation
 London offers rapid turnaround by regulators, and limits the time
regulators can take to approve offer documents
 US: SEC review periods longer, with no certainty on turnaround time
 AIM offers potentially shorter transaction timetable
Cost-benefit analysis favours London
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Comparison of international
listing locations
High profile Rapid timing
Simplified
disclosure
Trading /
liquidity
London Stock Exchange
NYSE / Nasdaq
Bovespa
Optimal
Least suitable
Strategic financings from global companies will converge on London or New York
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An intelligent approach to regulation
Companies
Minimise
bureaucracy
and cost
Investors
Balance
Competing
Needs
Maximise
protection
UK
Principles based “comply or explain”
Ranked first in corporate
governance standards by GMI,
Deminor and Davis Global Advisors
US
Rules based prescriptive and expensive
Increased cost of compliance and
risk premium (Financial Executive
& Korn Ferry Surveys)
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London Stock Exchange – intelligent
regulation
Corporate Governance and regulatory framework
Sarbanes–Oxley has increased the costs of listing in US:
• Has it improved governance standards in USA?
• No evidence that Sarbanes–Oxley delivers benefits beyond
those that apply under the UK regime
• The Cost of Capital: An International Comparison - report available
here:
http://www.londonstockexchange.com/NR/rdonlyres/B032122B-B1DA-4E4AB1C8-42D2FAE8EB01/0/Costofcapital_full.pdf
The UK’s intelligent approach to regulation & the success of the Combined
Code is the foundation for Europe’s deepest pool of capital in Europe and
why our Main Market is one of the world’s most cost-efficient to access
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Most advanced regulation and governance
Corporate governance: overall rating by country
UK
7.40
Ireland
7.39
Canada
7.31
USA
7.25
Finland
6.40
6.15
Germany
Norway
5.85
Switzerland
5.61
India
5.08
Spain
4.73
Mexico
4.20
China
3.34
0
1
2
3
4
5
6
Source: Governance Metrics International, 2007
Principles-based regulation: high standard, pragmatic application
No equivalent to Sarbanes-Oxley section 404
An intelligent approach.
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London Stock Exchange
Main features
Setting the standard for excellence
Where ideas take off
Highest standards of regulation
Easier entry requirements
Largest institutional investor base
Flexible regulatory regime
Deepest capital pool
Most liquid trading platforms
Specialist small-cap institutional & retail
investor base
Enhanced profile and status
Variety of tax benefits may be available
Investable indices
Bespoke indices
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The widest choice of proven global
markets
A choice of globally respected markets supported by a wide range of
institutional & retail investors
Main Market
Supports earlier stage
companies in their initial
growth period.
1,675 issuers
Supports more established
companies seeking further
growth.
1,550 issuers
Nominated Adviser (Nomad)
UK Listing Authority
Sponsor
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The world’s most successful growth market
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The widest choice of proven global
markets
Key
Statistics
•
AIM companies: 1,675
•
Overseas AIM companies: 343 (non UK incorporated)
•
IPOs on AIM in 2007: 182
•
Total capital raised in 2007: US$32.4bn
• US$13.2bn New
• US$19.2bn Further
•
Capital raised (new & further) since 1995: US$115bn
Source: London Stock Exchange trade statistics – April 2008
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AIM – critical mass to support growth
Number of IPOs
600
519
Number of admissions
500
462
400
355
284
277
300
177
200
123
145
107
160
162
102
Q1, 2008
75
100
41
0
1995
1996
1997
1998
1999
2000
2001
Source: London Stock Exchange trade statistics –April 2008
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2002
2003
2004
2005
2006
2007
2008
AIM today
As at April 2008, there were 1675 companies on AIM of which 343 were
international with a combined market capitalisation of £91billion.
590 companies have their primary business outside the UK
1400
1,347
1330
1,332
1,179
1200
UK
International
1000
905
800
694
654
587
600
493
400
325
291
286
304
235
200
347
343
220
118
116
3
17
22
21
22
31
42
50
60
0
1995
1996
1997
1998
1999
Source: London Stock Exchange trade statistics – April 2008
2000
2001
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2002
2003
2004
2005
2006
2007
2008 to
Apr
Raising new and further capital on AIM
31.4
Funds raised in ($bn)
New
32.4
Further
17.9
9.3
Q1, 2008
6.1
4.2
2.3
2000
2001
2.93
2.0
2002
2003
2004
2005
2006
2007
2008
2006- More money was raised on AIM in 2006 ($31bn) than on NASDAQ ($29bn)
2007- More money was raised on AIM in 2007 ($32bn) than on NASDAQ ($20bn)
Source: London Stock Exchange trade statistics – April 2008
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AIM - company size
400
350
Apr-08
Apr-07
No of Companies
300
250
200
150
100
50
0
Less than
$5m
$5m $10m
$10m $20m
$20m $50m
$50m $100m
$100m $200m
Market Value ($)
Source: London Stock Exchange trade statistics – April 2008
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$200m $500m
$500m $1000m
$1000m $2000m
over
$2000m
A diverse market
Top AIM sectors by market value & no. of companies April 08
180
Number of Companies
25,000
160
140
20,000
120
15,000
100
80
10,000
60
40
5,000
Source: London Stock Exchange trade statistics – April 2008
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Food Producers
Media
Travel &
Leisure
Software
Computer &
Services
Equity
Investment
Intruments
0
Support
Services
Real Estate
Oil & Gas
Producers
-
General
Financial
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Mining
Mkt Value ($m)
200
Latest Market Value $
Number of companies
30,000
AIM – The market of choice for
growing Mining companies
Mining companies on AIM: Money raised ($m)
5,262
New
Further
3,552
2,194
1,656
309
2002
598
2003
Source: London Stock Exchange April 08.
2005
2004
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2006
2007
Appropriate regulation and oversight
Flexible regulation
Admission Rules
• No minimum size to be admitted
• No minimum financial history required
• No minimum amount of shares to be in public hands
• In most cases, no prior shareholder approval required for
transactions
• Admission documents not pre-vetted by Exchange or UKLA but by
nominated adviser
Nominated adviser (Nomad) required at all times
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Appropriate regulation and oversight
Continuing obligations
•
AIM companies are subject to the AIM Rules which outline the continuing
obligations of being on a public market. Key continuing obligations are:
• AIM companies must have a Nomad at all times, otherwise they will be
suspended from the market
• AIM companies must disclose all price sensitive information in a timely manner
including substantial transactions, related party transaction, reverse takeovers
and other miscellaneous transactions
• Half yearly and annual report and accounts required in adherence with
deadlines
• All directors accept full responsibility, collectively and individually for the AIM
Rules
• Restrictions on deals for directors and applicable employees on AIM securities
during close periods
• UK Corporate Governance standards as best practice
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AIM has a deep pool of institutional
investors
Institutional Investors on AIM – Sector breakdown
Rank
1
2
3
4
5
Rank
Most Active Sector by Value of Institutional
Investment
Real Estate
Mining
Oil & Gas Producers
General Financial
Support Services
Value of Investments (£m)
8,618.6
6,593.3
5,953.0
5,702.5
5,455.7
Most Active Sector by Number of Institutional
Investment
Number of Investments
1
2
Mining
General Financial
920
914
3
4
5
Support Services
Real Estate
Software & Computer Services
613
581
556
Source: GCI Institutional Investors in AIM survey 2007
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Institutional Investors on AIM – Most
active
Rank
Most Active Institutions by Value of
investment
Value of Investments
(£m)
No. of Investments
1
BlackRock Merrill Lynch Investment
1,658.6
153
2
3
4
5
6
7
Invesco
AXA Investment Managers
CDS & Co (Nominees)
Fidelity
Artemis
Lansdowne Partners
1,339.8
998.5
908.2
887.3
791.0
785.5
102
172
7
155
132
38
8
9
10
Credit Suisse Group
AVIVA
Morgan Stanley
776.6
671.7
650.0
121
70
49
Source: GCI Institutional Investors in AIM survey 2007
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Institutional investors understand AIM
Leading investors
Fidelity Investments
Artemis Investment Management
Value of largest holdings, 2006
Value of largest holdings, 2006
$ million*
$ million*
- Sportingbet
Leisure
- Imperial Energy
Oil & gas
- First Calgary
Oil & gas
- Centurion Electronics
$268
- Star Energy
Oil & gas
117
- Develica Deutschld
Equity fund 49
91
- Cape
Support ser 47
Electronics 60
- Genesis
Oil & gas
44
- PIPEX Comms
Telecoms
57
- Coda
Software
41
- Highland Gold
Mining
53
- Speymill
Real estate 30
- Clipper Windpower
Electricity
47
- European Goldfields
Mining
30
- Star Energy
Oil & gas
41
- Prosperity Minerals
Bldg Mats
30
- Asia Energy
Coal
39
- Equest Balkan
Real estate 29
- Serica Energy
Oil & gas
39
- Imperial Energy
Oil & gas
Source: Teather & Greenwood, Growth Company Investor
* Translated into $ at £1.00 = $1.90
Data for year 2006
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$ 60
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To summarise… why choose AIM
• The world’s most successful growth market
• An internationally focused, professional investor base
• Comprehensive research coverage for international companies
• A more flexible approach to regulation
• Better value than NYSE or NASDAQ
• A global platform
The Exchange of choice for companies wishing to access the international capital
markets
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The world’s capital market
London Listing
• Access to global
capital
• Lower cost
• Lower risk
• Faster to market
• Intelligent
regulation
New York Listing
• Higher cost
• Slower to market
• Higher risk
• Sarbanes Oxley
• Section 404
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• Class actions
Contact us
Graham Dallas
Head of Business Development – The Americas
[email protected]
+44 (0) 20 7797 4055
Anne Moulier
Business Development Manager– Latin America
[email protected]
+44 (0) 20 7797 4584
Website: www.londonstockexchange.com
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