Press releases 2005

London Stock Exchange aims for Europe

AIM is the solution to Europe’s SME capital funding gap

The London Stock Exchange (“the Exchange”) is to develop AIM, the world’s most successful market for smaller growing companies, to accommodate the demand among small and medium sized companies (“SMEs”) across Europe for equity growth capital.

To achieve this, the Exchange will seek the support and commitment of the investment community in the other major European financial centres.  It will develop a network of links with investors, advisors, intermediaries as well as the issuers themselves in markets across Europe.

The announcement coincided with the publication today of independent research, conducted by Oxford Analytica, which estimates that the economic benefit of a truly pan-European market for SMEs would be in the range of a 0.3 to 0.6 per cent uplift in EU GDP. 

Speaking at a UK Presidency and EU Commission Risk Capital Summit in London, Chris Gibson-Smith, the Exchange’s chairman, said:

“Our shared goal is a powerful, competitive Europe that shapes the future of the world rather than retreats from its challenges. The growth will require, in significant part, the creation of an efficient and flexible capital market.  Europe’s ability to mobilise capital, distribute risk, and allocate funds to its most productive uses is a crucial test of its economic vitality. 

“We need to learn to allocate capital efficiently to the most active sectors of the economy – irrespective of national boundaries – especially to the smaller and medium sized companies that are responsible for two thirds of Europe’s employment and that have the capacity to grow faster and add jobs more quickly. 

“In order to achieve that goal Europe needs further to deepen its equity culture and to support a market structure capable of delivering efficient access to capital to these companies.

“We believe AIM’s destiny is to provide Europe with its growth market, building sound foundations for enterprise and growth across Europe, stimulating new economic activity and reducing the cost of capital in the European economy. 

“As I speak we are already engaged in discussions with investors, advisers and intermediaries to recreate in Europe the unique community that makes AIM so successful in London. Local nominated advisers across Europe will act as a pipeline for companies coming to AIM, and local member firms will provide liquidity, ongoing research and local distribution to investors. This should help to foster the entrepreneurial culture in Europe, with all the attendant benefits of economic growth and wealth creation that this brings.“

For further information, please contact:

John Wallace                     Press Office  +44 (0)20 7797 1222  
Richard Webster-Smith      Press Office +44 (0)20 7797 1058

Notes to editors:
The Risk Capital Summit on 4-5 October is jointly hosted by the  UK Government as part of its Presidency of the European Union and the European Commission. The event is being held at The Renaissance Chancery Court Hotel in London.  For further information:  http://www.riskcap2005.com/

• For a full transcript of the speech ">click here
• For a copy of the independent research" target="_blank"> click here
• Also joining AIM today is an Italian company, Acta S.P.A..  Acta is a developer and producer of platinum free catalysts and catalytic membranes for the fuel cell industry and it raising an estimated £9.0 million (€13.1 million) on admission, and has an estimated market capitalisation of £44.8 million (€64.96 million). 

For further information on Acta’s admission:

Nick Dibden 

Webber Shandwick +44 (0)20 7067 0742

About AIM
AIM is the world’s leading market for smaller, growing companies.  Since its launch in 1995, over 2,000 companies have chosen to join AIM, and have raised a total of almost £20 billion (€29 billion).  AIM now has a total of 1,318 quoted companies, including over 200 from overseas, and a total market value of over £50 billion (€73 billion).  AIM’s success is built on a simplified regulatory environment which has been specifically designed for the needs of smaller companies.

Key stats:

• Almost £20 billion (€29 billion) has been raised by AIM companies since the market’s launch in 1995.  More money has been raised in the first 9 months of 2005:  £4.95 billion (€7.18 billion), than in the first 5 years of the market's existence.
• 2004 was the most successful year in AIM’s history with a total 355 new companies admitted and a total of £2.78 billion (€4.07 billion) raised in new issues.  It was also a record year in terms of money raised in further issues: £1.88 billion (€2.75 billion); total money raised: £4.66 billion (€6.82 billion); and the total value of shares traded: £18.13 billion (€26.54 billion).
• These figures have already been exceeded this year.  From January 2005 to the end of September a total of 389 new companies have joined AIM and a total of £3.39 billion (€4.92 billion)  was raised in new issues.  It is also a record in terms of total money raised: [£4.95 billion (€7.18 billion)]
• The total value of shares traded on AIM in August 2005 was £3.41 billion (€4.94 billion), up 245% on the same month last year.
• AIM is unique as a smaller companies market for the level of institutional investment.  The total value of institutional investment in AIM now stands at £19.3 billion (€28.25 billion), more than double last years figure of £9.75 billion (€14.27 billion) [Source:  Growth Company Investor – ‘Institutional Investors in AIM 2005’ (September 2005)].
• AIM is greatly increasing its international profile with almost double the number of international companies quoted on the market at the end of September 2005.  As at 4th October, there are a total of 38 companies quoted on AIM from the EEA (ex. UK) with a combined market value of £1.7 billion (€2.49 billion)
• From January to end of September 2005 a total of 18 companies from the EEA (ex. UK)  joined AIM, raising a total of £58.96 million (€86.31 million)
• On 20 September 2005, SQS Software Systems AG. became the first German company to have its primary quotation on AIM.  In addition there are a further two companies with secondary quotations on AIM from Germany.