Zimbabwe Rising Conference 2010 -Richard Webster-Smith - London Stock Exchange - Financing opportunities for companies from Zimbabwe on the London Stock Exchange
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Zimbabwe Rising Conference 2010 -Richard Webster-Smith - London Stock Exchange - Financing opportunities for companies from Zimbabwe on the London Stock Exchange

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Zimbabwe Rising Conference 2010 -Richard Webster-Smith - London Stock Exchange - Financing opportunities for companies from Zimbabwe on the London Stock Exchange Zimbabwe Rising Conference 2010 -Richard Webster-Smith - London Stock Exchange - Financing opportunities for companies from Zimbabwe on the London Stock Exchange Presentation Transcript

  • London Stock Exchange- Financing options for African companies
    November 2010
  • Agenda
    • London – the world’s capital market
    • Listing shares in London
    • Listing DRs in London
    • Africa-focussed companies on London Stock Exchange’s markets
  • London Stock Exchange Group operates the largest and most liquid equities market in Europe
    Domestic market capitalisationof European exchanges as at 31 June 2010
    • Hosting many of the biggest companies in the world, the LSEG represent one third of Europe’ total market capitalisation.
    • 1,900 UK-incorporated companies are currently listed/quoted on our London markets, sharing an aggregate market cap of about US $2.6 trillion, the largest among European exchanges.
    • Close to 600 international companies are currently listed/quoted on our London markets, with their aggregate market cap reaching nearly US $3 trillion.
    BIT
    LSE
    Source: World Federation of Exchanges
    Average daily traded value (ADTV) and number of trades in shares, H1 2010
    • With close to 3,000 companies listed/quoted on its markets and over 500 member firms, the London Stock Exchange Group operates one of the most liquid cash equity marketplaces globally.
    • During the first half of 2010, an average of nearly US $3bn worth of shares were traded daily on the LSEG’s markets, more than any other major exchange in Europe.
    Source: World Federation of Exchanges
  • We provide cost-efficient access to the some of the world’s largest pools of international equity assets
    International equity assets under management in key financial centers
    International equity assets under management by type of investor (in USDbn)
    Banks
    Hong Kong
    $136bn
    Frankfurt
    $150bn
    Paris
    $222bn
    Insurance
    London
    $888bn
    Pension Funds
    New York
    $804bn
    Source: Ipreo June 2010
  • London offers access to a more international investor base
    Comparison of % of international investors in recently admitted companies and number of the international companies
    Source: Thomson Reuters
    International investors
    Domestic investors
  • London Stock Exchange offers a choice of routes to market, equally to UK and international companies
    Primary markets
    Commercial Companies equity shares and funds
    Commercial Companies all types of shares
    Depositary receipts
    Main Market
    Options, warrants, derivatives and fixed income
    OTHER
    Growth Companies
    Flexible route for DRs wishing to use domestic accounting standards
    Private equity, hedge funds, complex and single strategy funds
    Companies admitted to trading on other exchanges
    Admission totrading only
  • Agenda
    • London – the world’s capital market
    • Listing shares in London
    • Listing DRs in London
    • Africa-focussed companies on London Stock Exchange’s markets
  • Listing shares – choice of markets
    Profile
    Profile
    The Exchange’s flagship international market for established companies across all sectors.
    No. of share issuers: 1,180
    Avg. mkt cap: $4.6bn
    The Exchange’s international market for smaller growing companies across all sectors
    No. of share issuers: 1,204
    Avg. mkt cap: $86.7m
  • Main Market – listing segments
    Premium Segment
    • Compliance with the Listing Principles (LR 7)
    • Appointment of a sponsor
    • 75% of the business to be supported by a revenue earning track record
    • Control over the majority of the entity’s assets
    • Unqualified working capital statement
    • Combined Code (only UK companies, non-UK companies have to state compliance with their domestic corporate governance and explain any substantial differences)
    In addition to…
    • Prospectus approved by the UKLA
    • Minimum 25% shares in public hands*
    • Minimum market capitalisation £700,000
    • 3 years of audited financial information (or such shorter period since company has been in operation)
    • Free transferability of securities
    • Working capital statement covering 12 months (for commercial companies issuing shares only)
    • Compliance with the London Stock Exchange's Admission and Disclosure Standards
    Standard Segment (Commercial Companies and Depositary Receipts)
    * FSA will consider lower free float if it satisfied that there is sufficient liquidity in market
  • Main Market – key admission requirements
    1or such shorter period since company has been in operation;
    2 China , Canada, South Korea and India’s accounting standard will be reviewed by 2011;
    3 FSA will consider lower free float if it is satisfied that there will be sufficient liquidity in the market.
  • Main Market – key continuing obligations
    * overseas issuers need to explain any major differences
  • FTSE Indices inclusion
    Key rules which govern company eligibility are consistent across all FTSE indices:
    • Market capitalisation size
    • Free Float
    • Liquidity
    • Nationality
    • Most companies are classified according to country of incorporation and listing where these do not coincide priority is given to country of primary listing
    • Overseas issuers wishing to gain access to FTSE UK Series must adhere to Pre-emption Rights, Combined Code, City Code (takeovers), No Controlling Shareholder
    • FTSE Nationality Committee which decides on nationality allocation for specific companies meets quarterly
    • Companies incorporated in an emerging country (as classified by FTSE) will not be eligible for allocation to a developed country
    FTSE 100
    (100)
    FTSE 350
    £2000* m
    FTSE 250
    FTSE All-Share
    (660)
    (250)
    £300* m
    FTSE
    SmallCap
    (310)
    £50* m
    FTSE
    Fledgling
    (200)
    * Approximate size
  • AIM: an overview
    • AIM is the London Stock Exchange’s market for smaller, growing companies.
    • A platform for companies to raise capital (at admission and through further fundraisings) to help them realise their growth potential, within a tailored and balanced regulatory framework
    • Provides an attractive exit route for earlier stage investors and enables them to “recycle” capital
    • Supports companies beyond financing, by providing an attractive platform for them to increase their profile and visibility with key stakeholders
    * By country of incorporation
  • AIM’s regulatory framework
    AIM’s regulatory framework, controlled by LSEG & independent from an external competent authority, has been central to the success of the market as it has developed & adapted according to market conditions, issuer needs & investor demands.
  • Money raised on AIM
    Money raised on AIM, new & further 1995 - 2010
    Money raised (£m)
    Source: London Stock Exchagne Statistics, November 2010
    • Total money raised on AIM has fallen back to the 2004 level due to the financial crisis, but further money raised maintains good momentum, with recovery in IPO market underway
  • AIM provides access to leading institutional investors
    The investor base for AIM companies is both institutional and retail.
    The top 10 most influential institutions by value and number are:
    Source: GCI Institutional Investors in AIM survey 2010
  • Agenda
    • London – the world’s capital market
    • Listing shares in London
    • Listing DRs in London
    • Africa-focussed companies on London Stock Exchange’s markets
  • Listing DRs – choice of markets
    Profile
    Profile
    The Exchange’s flagship international market for established companies across all sectors.
    No. of DR issuers: 148
    Avg. mkt cap: $4.51bn
    The Exchange’s market for wholesale issuers of debt and depositary receipts
    No. of DR issuers: 37
    Avg. mkt cap: $144.0m
  • Listing DRs – key admission requirements
    1or such shorter period since company has been in operation;
    2 China , Canada, South Korea and India’s accounting standard will be reviewed by 2011;
    3 FSA will consider lower free float if it is satisfied that there will be sufficient liquidity in the market.
  • Listing DRs – key continuing obligations
  • Agenda
    • London – the world’s capital market
    • Listing shares in London
    • Listing DRs in London
    • Africa-focussed companies on the London Stock Exchange’s markets
  • African companies on the London Stock Exchange – facts and figures
    • 18 African companies with equity listings on the Main Market
    • 16 African companies with DRs listed on the Main Market or PSM
    • 49 Africa focussed companies quoted on AIM
    African Listings / Admissions in 2010:
    Total raised by African IPOs in 2010: £727.8m
  • Key regulatory comparisons
    The exchanges represented here are only a sample of our competitors *FSA will accept lower free float if its is satisfied that there will be sufficient liquidity in the market **Japan and US’ China, India, South Korea and Canada
  • Pricing - listed markets
    Admission
    London Stock Exchange
    UK and International Issuers
    Min: £6,085
    Max: £352,085
    Depositary Receipt Issuers
    Min: £20,000
    Max: £352,085
    FSA
    Vetting Fee - FSA
    Share Prospectus: £13,420 or £2,750
    DR Prospectus: £2,750
    In cases of complex transaction
    Super transaction - £50,000
    Significant transaction - £25,000
    Annual
    London Stock Exchange
    Domestic Trading Service
    Min: £4,005
    Max: £39,480
    International Trading Services
    Share issuers: £6,145 - £19,630
    DR issuers: £8,000 or £15,000*
    FSA
    Share issuers: £3,425 – no maximum (eg. £1bn market cap issuer – £9,634)
    Overseas Standard listed issuers - 20% discount
    DR issuers: £2,750
    *New securities may be introduced to the non-CCP segment but moved to our CCP service at a later date if trading volumes are deemed to be at a sufficient level. Suitability for the CCP service is determined by trading volumes and in conjunction with LCH Clearnet.
  • Contact us
    Ibukun Adebayo
    Head of Primary Markets
    Africa, India and Middle East
    Tel: +44 20 7797 1085
    Mobile: +44 7770 567 562
    Email: iadebayo@londonstockexchange.com
    Richard Webster-Smith
    Manager, Primary Markets
    Africa, India and Middle East
    Tel: +44 20 7797 1058
    Mobile: +44 7766 421 989
    Email: rwebstersmith@londonstockexchange.com
    Visit our website:www.londonstockexchange.com