London Stock Exchange- Financing options for African companies<br />November 2010<br />
Agenda<br /><ul><li>London – the world’s capital market
Listing shares in London
Listing DRs in London
Africa-focussed companies on London Stock Exchange’s markets</li></li></ul><li>London Stock Exchange Group operates the la...
1,900 UK-incorporated companies are currently listed/quoted on our London markets, sharing an aggregate market cap of abou...
Close to 600 international companies are currently listed/quoted on our London markets, with their aggregate market cap re...
During the first half of 2010, an average of nearly US $3bn worth of shares were traded daily on the LSEG’s markets, more ...
We provide cost-efficient access to the some of the world’s largest pools of international equity assets<br />Internationa...
London offers access to a more international investor base<br />Comparison of % of international investors in recently adm...
London Stock Exchange offers a choice of routes to market, equally to UK and international companies<br />Primary markets<...
Agenda<br /><ul><li>London – the world’s capital market
Listing shares in London
Listing DRs in London
Africa-focussed companies on London Stock Exchange’s markets</li></li></ul><li>Listing shares – choice of markets<br />Pro...
Main Market – listing segments<br />Premium Segment<br /><ul><li>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 e...
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
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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

  1. 1. London Stock Exchange- Financing options for African companies<br />November 2010<br />
  2. 2. Agenda<br /><ul><li>London – the world’s capital market
  3. 3. Listing shares in London
  4. 4. Listing DRs in London
  5. 5. Africa-focussed companies on London Stock Exchange’s markets</li></li></ul><li>London Stock Exchange Group operates the largest and most liquid equities market in Europe<br />Domestic market capitalisationof European exchanges as at 31 June 2010<br /><ul><li>Hosting many of the biggest companies in the world, the LSEG represent one third of Europe’ total market capitalisation.
  6. 6. 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.
  7. 7. Close to 600 international companies are currently listed/quoted on our London markets, with their aggregate market cap reaching nearly US $3 trillion. </li></ul>BIT<br />LSE<br />Source: World Federation of Exchanges<br />Average daily traded value (ADTV) and number of trades in shares, H1 2010<br /><ul><li>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.
  8. 8. 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.</li></ul>Source: World Federation of Exchanges<br />
  9. 9. We provide cost-efficient access to the some of the world’s largest pools of international equity assets<br />International equity assets under management in key financial centers<br />International equity assets under management by type of investor (in USDbn)<br />Banks<br />Hong Kong<br />$136bn<br />Frankfurt<br />$150bn<br />Paris<br />$222bn<br />Insurance<br />London<br />$888bn<br />Pension Funds<br />New York<br />$804bn<br />Source: Ipreo June 2010<br />
  10. 10. London offers access to a more international investor base<br />Comparison of % of international investors in recently admitted companies and number of the international companies<br />Source: Thomson Reuters<br />International investors<br />Domestic investors<br />
  11. 11. London Stock Exchange offers a choice of routes to market, equally to UK and international companies<br />Primary markets<br />Commercial Companies equity shares and funds<br />Commercial Companies all types of shares <br />Depositary receipts <br />Main Market<br />Options, warrants, derivatives and fixed income <br />OTHER<br />Growth Companies<br />Flexible route for DRs wishing to use domestic accounting standards <br />Private equity, hedge funds, complex and single strategy funds<br />Companies admitted to trading on other exchanges <br />Admission totrading only <br />
  12. 12. Agenda<br /><ul><li>London – the world’s capital market
  13. 13. Listing shares in London
  14. 14. Listing DRs in London
  15. 15. Africa-focussed companies on London Stock Exchange’s markets</li></li></ul><li>Listing shares – choice of markets<br />Profile<br />Profile<br />The Exchange’s flagship international market for established companies across all sectors.<br />No. of share issuers: 1,180<br />Avg. mkt cap: $4.6bn<br />The Exchange’s international market for smaller growing companies across all sectors <br />No. of share issuers: 1,204<br />Avg. mkt cap: $86.7m<br />
  16. 16. Main Market – listing segments<br />Premium Segment<br /><ul><li>Compliance with the Listing Principles (LR 7)
  17. 17. Appointment of a sponsor
  18. 18. 75% of the business to be supported by a revenue earning track record
  19. 19. Control over the majority of the entity’s assets
  20. 20. Unqualified working capital statement
  21. 21. Combined Code (only UK companies, non-UK companies have to state compliance with their domestic corporate governance and explain any substantial differences)</li></ul>In addition to…<br /><ul><li>Prospectus approved by the UKLA
  22. 22. Minimum 25% shares in public hands*
  23. 23. Minimum market capitalisation £700,000
  24. 24. 3 years of audited financial information (or such shorter period since company has been in operation)
  25. 25. Free transferability of securities
  26. 26. Working capital statement covering 12 months (for commercial companies issuing shares only)
  27. 27. Compliance with the London Stock Exchange's Admission and Disclosure Standards</li></ul>Standard Segment (Commercial Companies and Depositary Receipts)<br />* FSA will consider lower free float if it satisfied that there is sufficient liquidity in market<br />
  28. 28. Main Market – key admission requirements<br />1or such shorter period since company has been in operation; <br />2 China , Canada, South Korea and India’s accounting standard will be reviewed by 2011; <br />3 FSA will consider lower free float if it is satisfied that there will be sufficient liquidity in the market.<br />
  29. 29. Main Market – key continuing obligations<br />* overseas issuers need to explain any major differences<br />
  30. 30. FTSE Indices inclusion<br />Key rules which govern company eligibility are consistent across all FTSE indices: <br /><ul><li>Market capitalisation size
  31. 31. Free Float
  32. 32. Liquidity
  33. 33. Nationality
  34. 34. Most companies are classified according to country of incorporation and listing where these do not coincide priority is given to country of primary listing
  35. 35. Overseas issuers wishing to gain access to FTSE UK Series must adhere to Pre-emption Rights, Combined Code, City Code (takeovers), No Controlling Shareholder
  36. 36. FTSE Nationality Committee which decides on nationality allocation for specific companies meets quarterly
  37. 37. Companies incorporated in an emerging country (as classified by FTSE) will not be eligible for allocation to a developed country</li></ul>FTSE 100<br />(100)<br />FTSE 350<br />£2000* m<br />FTSE 250<br />FTSE All-Share<br />(660)<br />(250)<br />£300* m<br />FTSE<br />SmallCap<br />(310)<br />£50* m<br />FTSE<br />Fledgling<br />(200)<br />* Approximate size<br />
  38. 38. AIM: an overview<br /><ul><li>AIM is the London Stock Exchange’s market for smaller, growing companies.
  39. 39. 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
  40. 40. Provides an attractive exit route for earlier stage investors and enables them to “recycle” capital
  41. 41. Supports companies beyond financing, by providing an attractive platform for them to increase their profile and visibility with key stakeholders</li></ul>* By country of incorporation<br />
  42. 42. AIM’s regulatory framework<br />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.<br />
  43. 43. Money raised on AIM<br />Money raised on AIM, new & further 1995 - 2010 <br />Money raised (£m)<br />Source: London Stock Exchagne Statistics, November 2010<br /><ul><li>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</li></li></ul><li>AIM provides access to leading institutional investors<br />The investor base for AIM companies is both institutional and retail.<br />The top 10 most influential institutions by value and number are:<br />Source: GCI Institutional Investors in AIM survey 2010<br />
  44. 44. Agenda<br /><ul><li>London – the world’s capital market
  45. 45. Listing shares in London
  46. 46. Listing DRs in London
  47. 47. Africa-focussed companies on London Stock Exchange’s markets</li></li></ul><li>Listing DRs – choice of markets<br />Profile<br />Profile<br />The Exchange’s flagship international market for established companies across all sectors.<br />No. of DR issuers: 148<br />Avg. mkt cap: $4.51bn<br />The Exchange’s market for wholesale issuers of debt and depositary receipts<br />No. of DR issuers: 37<br />Avg. mkt cap: $144.0m<br />
  48. 48. Listing DRs – key admission requirements<br />1or such shorter period since company has been in operation; <br />2 China , Canada, South Korea and India’s accounting standard will be reviewed by 2011; <br />3 FSA will consider lower free float if it is satisfied that there will be sufficient liquidity in the market.<br />
  49. 49. Listing DRs – key continuing obligations<br />
  50. 50. Agenda<br /><ul><li>London – the world’s capital market
  51. 51. Listing shares in London
  52. 52. Listing DRs in London
  53. 53. Africa-focussed companies on the London Stock Exchange’s markets</li></li></ul><li>African companies on the London Stock Exchange – facts and figures<br /><ul><li>18 African companies with equity listings on the Main Market
  54. 54. 16 African companies with DRs listed on the Main Market or PSM
  55. 55. 49 Africa focussed companies quoted on AIM</li></ul>African Listings / Admissions in 2010:<br />Total raised by African IPOs in 2010: £727.8m<br />
  56. 56. Key regulatory comparisons<br />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<br />
  57. 57. Pricing - listed markets<br />Admission<br /> London Stock Exchange<br />UK and International Issuers <br />Min: £6,085<br />Max: £352,085<br />Depositary Receipt Issuers <br />Min: £20,000<br />Max: £352,085<br />FSA<br />Vetting Fee - FSA<br />Share Prospectus: £13,420 or £2,750<br />DR Prospectus: £2,750<br />In cases of complex transaction<br />Super transaction - £50,000<br />Significant transaction - £25,000<br />Annual<br /> London Stock Exchange<br />Domestic Trading Service <br />Min: £4,005<br />Max: £39,480<br />International Trading Services<br />Share issuers: £6,145 - £19,630<br />DR issuers: £8,000 or £15,000*<br />FSA<br />Share issuers: £3,425 – no maximum (eg. £1bn market cap issuer – £9,634)<br />Overseas Standard listed issuers - 20% discount<br />DR issuers: £2,750<br />*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.<br />
  58. 58. Contact us<br />Ibukun Adebayo<br />Head of Primary Markets<br />Africa, India and Middle East<br />Tel: +44 20 7797 1085 <br />Mobile: +44 7770 567 562<br />Email: iadebayo@londonstockexchange.com<br />Richard Webster-Smith<br />Manager, Primary Markets<br />Africa, India and Middle East<br />Tel: +44 20 7797 1058<br />Mobile: +44 7766 421 989<br />Email: rwebstersmith@londonstockexchange.com<br />Visit our website:www.londonstockexchange.com<br />

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