Listing in London

the routes to market

Tel Aviv, November 2006

Agenda
• London - the international market of choice
• Routes to a London listing
– AIM
– GDRs on the Main Market
– Primary listing on the Main Market
• Examples

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 London Stock Exchange - key statistics

Total companies
Domestic: 2,589
International: 599

Market capitalisation
UK listed: US$3,454bn
International listed: US$4,044bn
AIM: US$140bn

Equity turnover (Jan-Dec 2005)

Main Market:
Domestic: US$4,361bn
International: US$4,770bn

GDRs: US$131bn
AIM: US$75bn

Source: London Stock Exchange statistics – July 2006 3

 The Exchange of choice for international
companies

In 2005:
• London Stock Exchange - 493 new companies joined in 2005, 419 were IPOS, 93 of which were international
• NYSE – 122 IPOs in 2005, 12 companies of which were international
• Nasdaq – 138 IPOs in 2005, 21 companies of which were international

Source: London Stock Exchange and

individual exchange websites – July 2006 4
Routes to the London market

The London Stock Exchange offers international companies a number of

routes to market
1. AIM
– The world’s most successful growth market.
1. Main Market
– Global Depository Receipts (GDRs) Specialist securities targeting
professional investors focused on emerging markets. GDRs are traded on
the International Order Book (IOB).
– Primary Listing on the Main Market

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 A choice of proven, global markets

A choice of globally respected markets supported by

a wide range of institutional & retail investors

Main Market

Supports more established

companies seeking further growth.
Supports earlier stage companies in 1,628 issuers
their initial growth period.
1,560 issuers

UK Listing Authority

Nominated Adviser (Nomad)

Sponsor

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Agenda
• London - the international market of choice
• Routes to a London listing
– AIM
– GDRs on the Main Market
– Primary listing on the Main Market
• Examples

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 A market for growing companies

Source: London Stock Exchange trade statistics – July 2006

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 AIM – key statistics

 AIM companies: 1,560

 Overseas AIM companies: 277

 IPOs on AIM in 2005: 335

 259 UK
 76 overseas
AIM
Key statistics  Capital raised (new & further) since 1995: US$63bn

 Capital raised (new & further) in 2005: US$16bn

 US$ 12bn UK companies
 US$ 4bn overseas companies

Source: London Stock Exchange trade statistics – July 2006 9

 Flexible regulation

Admission Rules

 No minimum market cap

 No financial history required

 No minimum amount of shares to be in public hands

 In most cases, no prior shareholder approval required for

transactions

 Admission documents not pre-vetted by Exchange or UKLA but by

nominated adviser

 Nominated adviser (Nomad) required at all times

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 Continuing obligations

AIM companies are subject to the AIM Rules which outline the continuing obligations of being on
a public market. Some of the key continuing obligations are:

AIM companies must have a Nomad at all times, otherwise they will be suspended
from the market

AIM companies must disclose all price sensitive information in a timely manner
including substantial transactions, related party transaction, reverse takeovers and
other miscellaneous transactions

Half yearly and annual report and accounts required in adherence with deadlines

All directors accept full responsibility, collectively and individually for the AIM Rules

Restrictions on deals for directors and applicable employees on AIM securities during
close periods

UK Corporate Governance standards

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 Efficient capital raising

Money raised on AIM since launch

20,000
18,000
16,000
USD millions

14,000
12,000
Secondary issues
10,000 New issues
8,000
6,000
4,000
2,000
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
to
July
Year

Source: London Stock Exchange

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 Institutional Investors

Major institutions invest in AIM. Institutional investors understand

Rank Most active Institutions by value of No of Investments Value of Investments (£m)
investment
1 Fidelity 113 692.81
2 Artemis 94 451.33
3 Schroder Investment mgt 45 340.44
4 Foreign & Colonial 112 300.03
5 Merrill Lynch 46 244.49
6 UBS 38 226.29
7 Framlington 56 222.08
8 Invesco 51 221.47
9 Goldman Sachs 46 208.73
10 RAB Capital 58 205.02
11 Gartmore 65 196.04
12 Tiger Resource Finance 3 187.61
13 Jupiter Asset Management 44 180.58
14 Lansdowne 20 167.53
15 Aviva 39 162.26

Source: London Stock Exchange trade statistics – December 2005

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Agenda
• London - the international market of choice
• Routes to a London listing
– AIM
– GDRs on the Main Market
– Primary listing on the Main Market
• Examples

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 Key features of Main Market

 Pre-vetting of admission documents by the UKLA

 Compliance required with the rules of the UKLA

 Normally three years of financials required

 Minimum of 25% shares in public hands

Main Market
 Prior shareholders approval for certain
transactions

 Sponsors needed for certain transactions

No equivalent to Sarbanes-Oxley section 404 An

intelligent approach to regulation

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 GDRs on the London Stock Exchange

 Optimal point of access to the worldwide institutional investor base

 Major hub for international fund managers
 Access to all institutions worldwide
 Highest profile of any international market
 Widen shareholder base
 International profile and publicity
 Increased brand value
 A global peer group
 World’s only dedicated, liquid market for Depositary Receipts
 Transparent electronic platform for Depositary Receipts trading

London is the focal point of access to global investors

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 Case Study: London – a leader in
international trading
Trade value $bn

Trades ‘000
In 2005, IOB turnover was $131 billion. Jan - July 2006 over $160 billion.

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Source: London Stock Exchange – April 2006
 Main Market - UK Listing Authority

Admission Rules _ UKLA Listing rules, Chapter 18

Listing Rules
Rules in relation to issuers who are listed on or are seeking admission to the Official List
 
Disclosure Rules
Rules in relation to:
-issuers who have financial instruments admitted to trading on a regulated market; and
-persons discharging managerial responsibilities' and their 'connected persons'
 
Prospectus Rules
Rules in relation to those who are:
-seeking admission of securities to trading on a regulated market; or
-offering securities to the public. 

http://www.fsa.gov.uk/pages/doing/ukla/

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 Most advanced regulation and governance

Source: Governance Metrics International, March 2005

Principles-based regulation: high standard, pragmatic application

No equivalent to Sarbanes-Oxley section 404 An
intelligent approach.

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 Permutations of cross listing

TASE London Main London Main AIM

Market Primary Market
GDR
Frutarom First listed on
TASE

Tescom First listed on

TASE

888.com Sole primary

listing in London

XTL First listed on

Biopharmaceutical London

Bateman Sole listing on AIM

Engineering

Choice, flexibility, recognition

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 Contact

Graham Dallas
Head of Business Development – EMEA & Americas
gdallas@londonstockexchange.com
+44 (0) 20 7797 4055

Website: www.londonstockexchange.com

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