john edwards - london stock exchange
TRANSCRIPT
Opportunities for Russian Companies
On the London Stock Exchange & AIM
March 2007 2
Main Reasons for Listing on the LSE
Growth
Independent Market Expertise
Recommendations on how to maximise the value of joining a
London market
The Exchange: supports capital raising and generates liquidity supporting customers in maximising shareholder value
CapitalRaising it
efficiently & effectively when
required
ProfileMaximising
marketing/PR opportunities
LiquidityIncreasing and
maintaining liquidity
March 2007 3
Last 15 Months – Post IPO
23%
15%11%
7%11%
51%
-22%-17%-7%-10%-17%
CH
EL
YA
BIN
SK
CH
ER
KIZ
OV
O
CO
MS
TA
R
INT
EG
RA
PO
LY
ME
TA
L
RO
SN
EF
T
SE
VE
RS
TA
L
SIS
TE
MA
HA
LS
SIT
RO
NIC
S
TM
K
TM
E
13/02/0713/02/07
27/02/07
March 2007 4
Assets Under Management in Major Western Financial Centres
London is a global leader in asset management
Source: Big Dough, Hemscott (January 2007)
7.2
3.0 2.71.3 1.0
1.61.1 0.7 1.1
5.5
7.7
2.5
2.42.2 1.2
0.5 0.7 0.3
London NY Boston Paris Frankfurt San Fran. LA Chicago Munich
12.7
10.6
5.2
3.73.2
2.8
1.6 1.5 1.4
Other Assets ($tn)
Equity Assets ($tn)
March 2007 5
Source: London Stock Exchange - January 2007
DR Trading on IOB
In 2005, IOB total trading turnover was $131bn and in 2006 that number increased to $290bn, a 121% increase.
DR Trading
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
2001 2002 2003 2004 2005 2006
Mill
ion
s
Tra
de
Va
lue
(U
SD
)
0
100
200
300
400
500
600
700
800
900
1,000
Th
ou
san
ds
Tra
de
s
Number of Trades
Trade Value (USD)
March 2007 6
To summarise… Why choose AIM?
International profile
World’s most successful growth market
Balanced approach to regulation
Professional investor base
Cost effective
March 2007 7
Key AIM Statistics
• AIM: 1,635• UK: 1,331 • International: 304
• AIM Market Capitalisation: £94.4 bn
• AIM IPOs in 2006: 278• UK: 201• International: 77
• Capital raised since 1995*: £40.1bn
• Capital raised in 2006*: £15.7bn• UK: £10.3bn • International: £5.4bn
Source: London Stock Exchange trade statistics – March 2007
* New listings and further capital raises
March 2007 8
AIM Money Raised (£bn)
Source: London Stock Exchange, March 2007
AIM is more than an IPO market, it provides companies with high quality long term institutional liquidity and the ability to raise further capital to fund future growth
0
2
4
6
8
10
12
14
16
18
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Further Money Raised
New Money Raised
March 2007 9
Size Distribution for Companies on AIM(# Companies)
372
219 227197
135
26
174196
7 7
0-2 2-5 5-10 10-25 25-50 50-100 100-250 250-500 500-1,000
> 1,000
market capitalisation (£m)
The average AIM company market cap is £60 million. The average AIM international market cap is £111.
March 2007 10
Top 10 AIM Sectors by Market Cap
Source: London Stock Exchange trade statistics – March 2007
15.9%
10.7% 10.2% 10.0%
6.0% 4.6% 4.5% 4.5% 4.4%
3.6%
Min
ing
Rea
l E
stat
e
Oil
& G
asP
rod
uce
rs
Gen
eral
Fin
anci
al
Su
pp
ort
Ser
vice
s
Tra
vel
& L
eisu
re
Eq
uit
yIn
vest
men
tIn
stru
men
ts
Med
ia
So
ftw
are
&C
om
pu
ter
Ser
vice
s
Ph
arm
aceu
tica
ls&
Bio
tech
no
log
y
AIM is a diverse market spanning 39 sectors
March 2007 11
Admission Requirements
• No minimum size
• No trading record required
• No minimum number of shares in public hands
• No prior shareholder approval required for transactions*
• Admission documents pre-vetted by nominated adviser
• Nominated adviser required at all times
AIM’s success is built on a balanced regulatory environment, designed to make the floatation process as smooth as possible
* In most cases
March 2007 12
Rank
Institutional Investors No of Investments
Value of Investments (€m)
1 CDS & Co 10 4,809.842 Fidelity 160 1,544.493 Artemis Investment Management 130 1,009.364 New Star Asset Management 50 976.755 AMVESCAP 84 970.996 Merrill Lynch 67 887.467 Cede & Co 5 886.558 AXA 118 839.189 Gartmore 90 810.7110 Schroders 57 747.7911 Goldman Sachs 72 666.8212 UBS 59 564.9513 CSFB 54 564.5514 Lansdowne Partners 27 545.5815 F & C Asset Management 120 541.70
Liquidity & Institutional Investors on AIM
Source : Growth Company Investor
World’s largest institutional investors are all active participants on AIM.
March 2007 13
Imperial Energy Share Price Performance
600
700
800
900
1000
1100
1200
1300
1400
1500
16/1
1/20
06
30/1
1/20
06
14/1
2/20
06
28/1
2/20
06
11/0
1/20
07
25/0
1/20
07
08/0
2/20
07
22/0
2/20
07
08/0
3/20
07
22/0
3/20
07
Sh
are
Pri
ce (
GB
X)
• Oil exploration and production
• Listed on 05 April 2004
• Market cap at admission - £2.5mln
• Market cap today - £788mln
• Share price has risen by 130% over the past 6 months
Case Study 1 - Imperial Energy
March 2007 14
Case Study 2 - Aricom Plc
• Titanium
• Listed on 31st December 2003
• Market cap at admission - £14mln
• Market cap today - £304.48mln
• Share price has risen by 294% since 19th December 2005
Aricom Plc Share Price Performance
0
10
20
30
40
50
60
70
80
19/1
2/20
05
19/0
1/20
06
19/0
2/20
06
19/0
3/20
06
19/0
4/20
06
19/0
5/20
06
19/0
6/20
06
19/0
7/20
06
19/0
8/20
06
19/0
9/20
06
19/1
0/20
06
19/1
1/20
06
19/1
2/20
06
19/0
1/20
07
19/0
2/20
07
19/0
3/20
07
Sha
re P
rice
(GB
X)
March 2007 15
Prospectus Preparation
Underwriting & analytical coverage
Broker
NOMAD
Company
Short -form report
TechnologyExperts
Reporting Accountants
Legal reports and negotiations
Law Firm(NOMAD’s)
Law Firm(Corporate)
Public Relations and Investor Relations
Listing and trading Services
Stock Exchange: AIM
RegistrarPR firms
IndependentResearchersLHC
£10k
CREST Co
Source: Oxford Said Business School MBA Project, August 2006 as amended by London Stock Exchange
Cost structure for AIM listing
The total cost of raising £50m ranges between £2.5-5m (5%-10% cost range) excluding value of options
£150-200kplus 1% option
3-5% of the deal, plus 1% option
£25k-£50k
£100k-£150k
£150k-£300kof which Nomad’s
Lawyers get 25-40%
March 2007 16
Jon EdwardsSenior Manager, CIS & CEE+44 (0) 20 7797 [email protected]
Zarina KorolovaManager, CIS & CEE+44 (0) 20 7797 [email protected]
www.londonstockexchange.com/aim
Contact Details