Transcript Document
Listing in London
the routes to market
Tel Aviv, November 2006
Agenda
• London - the international market of choice • Routes to a London listing – AIM – GDRs on the Main Market – Primary listing on the Main Market • Examples 2
London Stock Exchange - key statistics
Source: London Stock Exchange statistics – July 2006
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Total companies
Domestic: 2,589 International: 599
Market capitalisation
UK listed: US$3,454bn International listed: US$4,044bn AIM: US$140bn
Equity turnover (Jan-Dec 2005)
Main Market: Domestic: US$4,361bn International: US$4,770bn GDRs: US$131bn AIM: US$75bn
The Exchange of choice for international companies
Total number of IPOs on the LSE, Nasdaq and NYSE 2002 to YTD 2006
200 150 100 50 450 400 350 300 250
London Stock Exchange Nasdaq NYSE
0 2000 2001 2002 2003 2004 2005 YTD 2006
In 2005:
• London Stock Exchange - 493 new companies joined in 2005, 419 were IPOS, 93 of which were international • NYSE – 122 IPOs in 2005, 12 companies of which were international • Nasdaq – 138 IPOs in 2005, 21 companies of which were international
Source: London Stock Exchange and individual exchange websites – July 2006
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Routes to the London market
The London Stock Exchange offers international companies a number of routes to market 1. AIM – The world’s most successful growth market. 2. Main Market – Global Depository Receipts (GDRs) Specialist securities targeting professional investors focused on emerging markets. GDRs are traded on the International Order Book (IOB).
– Primary Listing on the Main Market 5
A choice of proven, global markets A choice of globally respected markets supported by a wide range of institutional & retail investors
Supports earlier stage companies in their initial growth period.
1,560 issuers
Main Market Supports more established companies seeking further growth.
1,628 issuers Nominated Adviser (Nomad) UK Listing Authority Sponsor
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Agenda
• London - the international market of choice • Routes to a London listing – AIM – GDRs on the Main Market – Primary listing on the Main Market • Examples 7
A market for growing companies
Distribution of AIM companies by market value July 2005 vs July 2006
400 350 300 250 200 150 100 50 0 less than $3.8m
$3.8m to $9.5m
$9.5m to $19m $19m to $47m $47m to $95m
Market Value ($)
No of companies Jul-06 No of companies Jul-05 $95m to $189m $189m to $473 more than $473m
Source: London Stock Exchange trade statistics – July 2006
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AIM Key statistics
AIM – key statistics
AIM companies: 1,560 Overseas AIM companies: 277 IPOs on AIM in 2005: 335 259 UK 76 overseas Capital raised (new & further) since 1995: US$63bn Capital raised (new & further) in 2005: US$16bn US$ 12bn UK companies US$ 4bn overseas companies
Source: London Stock Exchange trade statistics – July 2006
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Flexible regulation Admission Rules
No minimum market cap
No 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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Continuing obligations
AIM companies are subject to the AIM Rules which outline the continuing obligations of being on a public market. Some of the 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 11
Efficient capital raising
Money raised on AIM since launch
20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 to July
Year
Secondary issues New issues
Source: London Stock Exchange
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Institutional Investors
Major institutions invest in AIM.
Institutional investors understand
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Rank Most active Institutions by value of investment
Fidelity Artemis Schroder Investment mgt Foreign & Colonial Merrill Lynch UBS Framlington Invesco Goldman Sachs RAB Capital Gartmore Tiger Resource Finance Jupiter Asset Management Lansdowne Aviva
No of Investments
113 94 45 112 46 38 56 51 46 58 65 3 44 20 39
Value of Investments (£m)
692.81
451.33
340.44
300.03
244.49
226.29
222.08
221.47
208.73
205.02
196.04
187.61
180.58
167.53
162.26
Source: London Stock Exchange trade statistics – December 2005
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Agenda
• London - the international market of choice • Routes to a London listing – AIM – GDRs on the Main Market – Primary listing on the Main Market • Examples 14
Main Market
Key features of Main Market
Pre-vetting of admission documents by the UKLA Compliance required with the rules of the UKLA Normally three years of financials required Minimum of 25% shares in public hands Prior shareholders approval for certain transactions Sponsors needed for certain transactions
No equivalent to Sarbanes-Oxley section 404 An intelligent approach to regulation
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GDRs on the London Stock Exchange
Optimal point of access to the worldwide institutional investor base Major hub for international fund managers Access to all institutions worldwide Highest profile of any international market Widen shareholder base International profile and publicity Increased brand value A global peer group World’s only dedicated, liquid market for Depositary Receipts Transparent electronic platform for Depositary Receipts trading
London is the focal point of access to global investors
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Case Study: London – a leader in international trading
200 Trading of DRs on International Order Book (2001 - 7 MNTHS 2006) Turnover $ Trades 600 180 160 500 140 120 100 400 300 80 60 40 20 200 100 0 2001 2002 2003 2004 2005 7 MNTHS 2006
In 2005, IOB turnover was $131 billion. Jan - July 2006 over $160 billion.
17 Source: London Stock Exchange – April 2006
Main Market - UK Listing Authority
Admission Rules _ UKLA Listing rules, Chapter 18
Listing Rules
Rules in relation to issuers who are listed on or are seeking admission to the Official List
Disclosure Rules
Rules in relation to: -issuers who have financial instruments admitted to trading on a regulated market; and -persons discharging managerial responsibilities' and their 'connected persons'
Prospectus Rules
Rules in relation to those who are: -seeking admission of securities to trading on a regulated market; or -offering securities to the public.
http://www.fsa.gov.uk/pages/doing/ukla/
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Most advanced regulation and governance
Corporate governance: overall rating by country
UK USA Switzerland Germany Italy Singapore Hong Kong France Japan
4.05
4.05
5.53
5.23
5.08
5.06
7.39
7.03
3.49
0 1 2 3 4 5 6 Source: Governance Metrics International, March 2005
Principles-based regulation: high standard, pragmatic application
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No equivalent to Sarbanes-Oxley section 404 An intelligent approach.
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Permutations of cross listing
Frutarom Tescom 888.com
XTL Biopharmaceutical Bateman Engineering TASE London Main Market Primary London Main Market GDR Choice, flexibility, recognition AIM
First listed on TASE First listed on TASE Sole primary listing in London First listed on London Sole listing on AIM
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Graham Dallas Head of Business Development – EMEA & Americas [email protected] +44 (0) 20 7797 4055 Website: www.londonstockexchange.com
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