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The world’s capital market Listing in London April 2008 Global platform for global institutional investors Local market Regional funds and retail investors USA Asia Central & Eastern Europe Europe UK Global institutional investor base 2 144A US Institutional Investors London Stock Exchange London Stock Exchange - key statistics Total companies Domestic: 2,588 International: 717 Market capitalisation Main Market: UK listed: US$3,864bn International listed: US$4,586bn AIM: US$194bn Turnover value (Jan-Dec 2007) Main Market: US$8,054bn AIM: US$150bn Source: London Stock Exchange statistics – December 2007 3 The platform of choice for international companies Total number of IPOs on the LSE, Nasdaq and NYSE 2000-2007 450 400 London Stock Exchange Nasdaq NYSE 350 300 250 200 150 100 50 0 2000 2001 2002 2003 2004 2005 2006 2007 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 $88bn raised on the London Stock Exchange. Source: London Stock Exchange and other exchanges website – December 2007 4 Comparison of international listing locations High profile Rapid timing Simplified disclosure Trading / liquidity London Stock Exchange NYSE / Nasdaq TSX European Exchanges ? ? Optimal ? Least suitable Strategic financings from global companies will converge on London or New York 5 An intelligent approach to regulation Companies Minimise bureaucracy and cost Investors Balance Competing Needs Maximise protection UK Principles based “comply or explain” Ranked first in corporate governance standards by GMI, Deminor and Davis Global Advisors US Rules based prescriptive and expensive Increased cost of compliance and risk premium (Financial Executive & Korn Ferry Surveys) 6 Most advanced regulation and governance Corporate governance: overall rating by country 7.39 UK 7.03 USA Switzerland 5.53 5.23 Germany Italy 5.08 Singapore 5.06 Hong Kong 4.05 France 4.05 Japan 3.49 0 1 2 3 4 5 6 7 Principles-based regulation: high standard, pragmatic application No equivalent to Sarbanes-Oxley section 404 An intelligent approach. Source: Governance Metrics International, March 2005 7 8 London Stock Exchange Main features Setting the standard for excellence Where ideas take off Highest standards of regulation Easier entry requirements Largest institutional investor base Flexible regulatory regime Deepest capital pool Most liquid trading platforms Specialist small-cap institutional & retail investor base Enhanced profile and status Variety of tax benefits may be available Investable indices Bespoke indices 8 Raising new and further capital on AIM Funds raised ($bn) 35 30 Further money raised ($bn) 25 Money raised at admission ($bn) 20 15 10 5 0 2000 2001 2002 2003 2004 2005 2006 2007 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 – December 2007 9 Selected International Companies listed on Main Market - 2007 Company Country Sector Money raised $ Smurfit Kappa Plc Ireland General Industrials Magnitogorsk Iron & Steel Works Russia Industrial Metals AFI Development Plc Cyprus Real Estate VTB Bank (JSC) Russia Banks $6.3bn PIK Group OJSC Russia Real Estate $912m Alliance bank JSC Kazakhstan Banks $691m Innolux Display Corporation Taiwan Technology Hardware $1.3bn Guaranty Trust Bank Nigeria Banks $736m United Bank Ltd Pakistan Banks $556m Uralkali JSC Russia Chemicals $901m Grupo Clarin Argentina Media $450m Hansen Transmissions Int NV Belgium Industrial Engineering $623m In 2007 $56 billion was raised on London’s Main Market by companies Source: London Stock Exchange - 2007 10 $1.95bn $995m $1.5 bn 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 • Class actions 11