listing in london the routes to market tel aviv, november 2006

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Listing in London the routes to market Tel Aviv, November 2006

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Listing in Londonthe routes to market

Tel Aviv, November 2006

2

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

3

London Stock Exchange - key statistics

Total companiesDomestic: 2,589

International: 599

Market capitalisationUK listed: US$3,454bnInternational listed:

US$4,044bnAIM: US$140bn

Equity turnover (Jan-Dec 2005) Main Market:

Domestic: US$4,361bnInternational: US$4,770bn

GDRs: US$131bn AIM: US$75bn

Source: London Stock Exchange statistics – July 2006

4Source: London Stock Exchange and individual exchange websites – July 2006

The Exchange of choice for international companies

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

Total number of IPOs on the LSE, Nasdaq and NYSE 2002 to YTD 2006

0

50

100

150

200

250

300

350

400

450

2000 2001 2002 2003 2004 2005 YTD 2006

To

tal N

o o

f IP

Os

London Stock Exchange

Nasdaq

NYSE

5

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

Routes to the London market

6

A choice of proven, global markets

A choice of globally respected markets supported by a wide range of institutional &

retail investors

Supports more established companies seeking further

growth.1,628 issuers

Supports earlier stage companies in their initial growth

period.1,560 issuers

Main Market

Sponsor

UK Listing Authority

Nominated Adviser (Nomad)

7

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

8

A market for growing companies

Distribution of AIM companies by market value July 2005 vs July 2006

0

50

100

150

200

250

300

350

400

less than$3.8m

$3.8m to$9.5m

$9.5m to$19m

$19m to$47m

$47m to$95m

$95m to$189m

$189m to$473

more than$473m

M arket Value ($)

No

of

com

pan

ies

No of companies Jul-06

No of companies Jul-05

Source: London Stock Exchange trade statistics – July 2006

9

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

AIM Key statistics

Source: London Stock Exchange trade statistics – July 2006

AIM – key statistics

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Flexible regulation

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

Admission Rules

11

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

All directors accept full responsibility, collectively and individually for the AIM Rules

Half yearly and annual report and accounts required in adherence with deadlines

Restrictions on deals for directors and applicable employees on AIM securities during close periods

UK Corporate Governance standards

12

Money raised on AIM since launch

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006to

July

Year

US

D m

illi

on

s

Secondary issues

New issues

Source: London Stock Exchange

Efficient capital raising

13

Institutional investors understand Rank

Most active Institutions by value of investment

No of Investments

Value of Investments (£m)

1 Fidelity 113 692.812 Artemis 94 451.333 Schroder Investment mgt 45 340.444 Foreign & Colonial 112 300.035 Merrill Lynch 46 244.496 UBS 38 226.297 Framlington 56 222.088 Invesco 51 221.479 Goldman Sachs 46 208.7310 RAB Capital 58 205.0211 Gartmore 65 196.0412 Tiger Resource Finance 3 187.6113 Jupiter Asset Management 44 180.5814 Lansdowne 20 167.5315 Aviva 39 162.26

Major institutions invest in AIM.

Source: London Stock Exchange trade statistics – December 2005

Institutional Investors

14

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

15

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

Main Market

16

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

17Source: London Stock Exchange – April 2006

Case Study: London – a leader in international trading

In 2005, IOB turnover was $131 billion. Jan - July 2006 over $160 billion.

Trading of DRs on International Order Book (2001 - 7 MNTHS 2006)

-

20

40

60

80

100

120

140

160

180

200

2001 2002 2003 2004 2005 7MNTHS2006

Trade valu

e

$ billion

0

100

200

300

400

500

600

Tra

de

s '

00

0

Turnover $

Trades

Tra

de v

alu

e $

bn

Tra

des ‘0

00

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Main Market - UK Listing Authority

Listing RulesRules 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 RulesRules in relation to those who are: -seeking admission of securities to trading on a regulated market; or-offering securities to the public. 

Admission Rules _ UKLA Listing rules, Chapter 18

http://www.fsa.gov.uk/pages/doing/ukla/

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Most advanced regulation and governance

Source: Governance Metrics International, March 2005

Corporate governance: overall rating by country

3.49

4.05

4.05

5.06

5.08

5.23

5.53

7.03

7.39

0 1 2 3 4 5 6 7 8

J apan

France

Hong Kong

Singapore

Italy

Germany

Switzerland

USA

UK

Principles-based regulation: high standard, pragmatic application

No equivalent to Sarbanes-Oxley section 404 An intelligent approach.

20

TASE

London Main

Market Primary

London Main

Market GDR

AIM

Frutarom First listed on TASE

Tescom First listed on TASE

888.com Sole primary listing in London

XTL Biopharmaceutical

First listed on London

Bateman Engineering

Sole listing on AIM

Permutations of cross listing

Choice, flexibility, recognition

21

Contact

Graham Dallas

Head of Business Development – EMEA & Americas

[email protected]

+44 (0) 20 7797 4055

Website: www.londonstockexchange.com