equity markets – preparing for the future
DESCRIPTION
Equity Markets – Preparing for the Future. March 31, 2009 in Nizhny Novgorod. Key Themes. The London Stock Exchange is an established platform for international companies to raise capital; Equity today is undervalued relative to bonds - PowerPoint PPT PresentationTRANSCRIPT
Author: Jon Edwards
Equity Markets – Preparing for the Future
March 31, 2009 in Nizhny Novgorod
2
Key Themes
1. The London Stock Exchange is an established platform for international companies to raise capital;
2. Equity today is undervalued relative to bonds 3. Last week saw 1.9 billion USD of flow into Global
Emerging Markets funds - At the country and regional level there was a marked preference for commodity producers with Brazil, Russia, Australia and Canada Equity Funds all posting solid inflows.
4. In the first half of 2008 before the global crisis intensified, AIM led all growth markets in funds raised
5. Companies from Russia (and other CIS) have done well on AIM in IPO and further capital raised
6. The time is right to start thinking about your equity valuations
3
Money Raised - Russia and CIS
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
1999 2000 2005 2006 2007
£ m
ilio
n
Money Raised - North America
0
500
1000
1500
2000
2500
3000
3500
2004 2005 2006 2007
£ m
ilio
n
Money Raised - EMEA
0
500
1000
1500
2000
2500
3000
3500
4000
4500
2004 2005 2006 2007
£ m
ilion
Money Raised - East Asia and Australia
0
500
1,000
1,500
2,000
2,500
2004 2005 2006 2007
£ m
ilio
n
Capital raised on our markets
Money Raised - South America
0
50
100
150
200
250
2002 2004 2007
£ m
ilio
n
4Source: QFR, www.quasarfinancialresearch.com
Prospects for Equity in 2009 -What the Federal Reserve Earnings Model tells us
5Source: EPFR
Equity Fund Flows – Looking for Yield
“The latest data certainly paints a picture of money leaving essentially passive vehicles such as Money Market Funds and being put to work in funds offering more risk and higher
rewards” - EPFR Global Senior Analyst Cameron Brandt.
GEM Investment Flow - Week of 23.03.09 (US$ mil)
45
708
535
449
0
100
200
300
400
500
600
700
800
03/23/09 03/24/09 03/25/09 03/26/09
6Source: IPO Watch Report, Q3 2008
591
41 35 24 13 14 1.7 5.1 00
100
200
300
400
500
600
700
AIM (L
SE)
EuroM
TF (Luxe
mbour
g)
First N
orth (O
MX)
Osl
o Axe
ss
NewCon
nect (
WSE)
Altern
ext (
NYSE Euro
next)
Mar
che L
ibre
(NYSE E
uron
ext)
Entry S
tandar
d (DB)
IEX (I
SE)
IPO Money Raised – Benchmarking AIM
7
CIS AIM Money Raised,(£m)
Source: London Stock Exchange Statistics, March 2009
124
182 186
623 615
275
52
118
374
514
662
34
0
100
200
300
400
500
600
700
up to 2003 2004 2005 2006 2007 2008
£,m
Further Raises
Raised at IPO
The average for CIS AIM companies at admission is £98m and the average further raise is £26m.
Money Raised by CIS companies on AIM (£m)
9
Conclusions
• Investors will return to equity markets• Emerging markets with a strong commodities base
will be among the first to receive fresh capital• Russian and CIS companies have established a
visible presence in London, not only on the Main Market but on AIM as well
• Small and Middle-Cap companies need to include AIM on their menu of finance options in 2009/10
10
Contacts
Jon EdwardsSenior Manager, CEE & CISInternational Business [email protected]+44 20 77971599
Maria AleksandrovaCEE & CIS Team,[email protected]+44 20 77971444