Written evidence from the London Stock
Exchange Group
ROLE OF THE LONDON STOCK EXCHANGE IN UK TRADE
AND INVESTMENT
1. INTRODUCTION
The London Stock Exchange Group welcomes the focus
that the Business Innovation and Skills Select Committee is giving
to the UK's policy and actions on international trade and investment.
Through its international business development activity,
the London Stock Exchange Group has been extremely successful
in attracting international companies to the UK to raise capital
through our markets. We also provide UK businesses, both large
and small, with a globally recognised platform—making them
visible to investors all over the world. To continue to do this
and maintain the global economic competitiveness of London's markets,
it is essential that the UK both maintains and strengthens its
focus on international trade and investment, especially as the
balance of global economic power shifts away from traditional
Western economic sand towards the emerging economies.
This briefing includes a short update on the Exchange's
international trade activity—our primary markets and technology
business development.
2. KEY EXCHANGE
MESSAGES ON
UK TRADE AND
INVESTMENT
- The Exchange is a world champion in international
listings, with major positive knock on effects for UK financial
services and London's status as a global financial centre.
We are the number one market globally for international listings—we
want to maintain this and to work with the Government to attract
more international companies to London. The Exchange now has 592
foreign firms from nearly 70 countries—more international
firms than any other major Exchange (there are 501 on the NYSE
(US) and 74 on Deutsche Borse). It is vital to London's sustainability
as a financial centre that it remains open and welcoming to international
companies and capital.
- A listing on our markets enables UK business,
both large and small to benefit from the most international pool
of capital in the world. In 2009, UK-incorporated
companies listed on our growth market AIM supported the jobs of
570,000 jobs and directly contributed £12 billion in GDP
to the UK economy. A listing on AIM gives companies an international
platform, making them visible to investors all over the world.
There are many case studies we can share of UK AIM companies who
have directly benefited from international investment through
AIM.
- We are very active in promoting London as
a capital raising venue in Russia, China, India and Latin America.
We would be happy to share examples of successful UK trade engagement
with these countries and our experiences of engaging with companies
in these countries. It is vital that UK Government departments
are joined up in their approach to trade issues, as there have
been occasions when a lack of such an approach has directly hindered
vital trade relations.
- The London Stock Exchange Group has a strong
history in building strong partnerships with capital markets providers
around the world including the Johannesburg
Stock Exchange, Tokyo Stock Exchange with Tokyo AIM and the Oslo
Bourse. In the long term, our goal is mutual development of global
capital markets.
3. EXCHANGE KEY
INTERNATIONAL BUSINESS
INFORMATION
3.1 Primary markets
Below is a summary of our priority countries for
primary markets in 2011:
- India—we
have seen significant issuance from this region and continue to
promote the exchange there. We also cooperate with the local exchange
through a MoU arrangement. Recent
listings include: Essar Energy
(India, May 2010) raised £1.3 billion though its premium
listing, and was the largest ever Indian IPO in London and the
second largest Indian IPO on a public market anywhere in the world.
Five Indian companies have joined AIM in ten weeks, raising an
estimated $344.4 million: Jubilant Energy raises $85 million in
the third largest IPO on AIM this year, $2.3 billion raised by
Indian firms in London in 2010, 28 Indian firms on AIM.
- China—We
have established a close cooperation with the HMT and are further
strengthening collaboration with the local regulators. In conjunction
with the FSA we devised two new products to further facilitate
capital raising in London by Chinese issuers.
- Latin America and Africa—We
are seeing a strong potential from the region and will continue
to re-enforce our presence there. Recent
listings include: African
Barrick Gold (Tanzania, March 2010). £581 million at admission.
- Russia and CIS—This
is a region from which we already have more issuers than any other
exchange in the world. We are closely cooperating with the local
exchanges and monitoring any regulatory developments that may
affect the issuers from that region. Recent
listings include: Avangard
(Ukraine, May 2010). $187.5 million at admission.
- Mongolia—We
are participating on a tender to provide further help to the local
exchange and the government privatisation plans.
3.2 MillenniumIT—Capital Markets Technology
partnerships
The Exchange is working across the world to develop
partnerships with capital markets operators in emerging economies.
Technology advances are supporting greater global cooperation.
Our acquisition of the Sri Lankan technology company MillenniumIT
is an example of this. Through the Exchange, MillenniumIT is now
providing trading platforms globally and their technology is used
by markets in Croatia, Kenya, India, Sri Lanka as well as the
London Metal Exchange and ICAP.
Our international partnerships work in a number of
ways—trading, information, technology. For example:
- (1) We have a market surveillance system
and business partnership with Egypt.
- (2) Johannesburg —trading system and
business partnership.
- (3) Norway—trading system and business
partnership.
January 2011
|
