listing in london the routes to market tel aviv, november 2006
TRANSCRIPT
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
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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
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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)
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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
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
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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
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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
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
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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
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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
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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
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
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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
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)
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20
40
60
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100
120
140
160
180
200
2001 2002 2003 2004 2005 7MNTHS2006
Trade valu
e
$ billion
0
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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.
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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
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Contact
Graham Dallas
Head of Business Development – EMEA & Americas
+44 (0) 20 7797 4055
Website: www.londonstockexchange.com