Listing in the heart of the world s financial markets 28 MARCH 2013

Transcription

1 Listing in the heart of the world s financial markets 28 MARCH 2013

2 London is the premier listing choice A listing on the London Stock Exchange enables companies to: raise profile in the world s most international market raise capital from the most diverse global investor base attract investors from all regions of the world Through our group companies we endeavour to provide the best listing and trading environment for our issuers be listed in a time zone that can trade with the world gain a listing alongside a global peer group access liquid trading platforms choose a market that meets their needs interact with advisors and regulators with deep experience in international markets convert securities into a global mergers and acquisition currency 2

3 London is the key global listing venue London Stock Exchange Group LSEG HKSE NYSE Euronext (US) NYSE Euronext (Europe) NASDAQ Deutsche Borse Total Market cap (of which international) * USD 8,359bn (USD 5,152bn) USD 4,189bn (USD 548bn) USD 19,976bn (USD 7,537bn) USD 4,138bn (USD 1,843bn) USD 5,000bn (USD 658bn) USD 1,337bn (USD 19bn) Number of listed companies (of which international) * 2,666 (593) 1,545 (35) 2,500 (438) 1,336 (127) 2,557 (341) 768 (82) Flagship Index FTSE 100 Hang Seng Index Dow Jones Industrial Euronext 100 Dow Jones Industrial DAX International companies in the index Yes No No No No No Analyst Coverage (of which covering int l companies)* 2,658 (593) 1,545 (35) 2,494 (438) 1,336 (127) 2,556 (341) 679 (36) As at October 2012 *Sources: Bloomberg. International -based on country of domicile

4 We host the most international issuers from a diverse range of sectors Number of international companies, by sector Market cap of int l companies USD bn Industrial Goods & Services LSEG NYSE US NYSE EU NASDAQ SGX 600 Basic Resources Banks Basic Resources Chemicals Construction Financial Services Industrial G&S Media Oil & Gas Real Estate Retail Tech Telecom DB HKEX LSEG NASDAQ NYSE Euronext (EU) NYSE Euronext (US) Utilities LSEG NYSE US HKEX NYSE EU SGX Technology 300 to compare themselves against their peers Trading on our markets enables issuers to access knowledgeable and experienced investor community in London maximise their liquidity potential minimise cost of flotation LSEG NYSE US NASDAQ NYSE EU SGX We also lead in trading companies from almost every other sector International companies as at Oct Based on country of domicile. Source: Bloomberg and London Stock Exchange calculation. 4

5 We operate the largest and the most liquid equity market in Europe Domestic market capitalisation USD (m) Close to 3,000 companies share an aggregate market cap of around USD 8 trillion Close to 600 international companies with aggregate market cap exceeding USD 5 trillion Daily traded value and number of transactions Transaction value - USD (m) LSEG NYSE Euronext (Europe) Deutsche Börse NASDAQ OMX Nordic Exchange Number of transactions (000s) LSEG NYSE Euronext (Europe) Deutsche Borse NASDAQ OMX Nordic Exchange Over 500 member firms have access to our trading systems In 1H 2012, on average over USD 9bn worth of shares were traded daily on the LSEG s markets, more than any other exchange in Europe (Source: World Federation of Exchanges, September

6 Listing on our markets enables issuers to be tracked by a wide universe of analysts giving global visibility A London listing provides for the largest analyst exposure compared to any other financial centre Total number of analysts following international listed companies, by listing venue Analysts raise profile for listed companies which they cover Analysts reports deepen issuers liquidity potential London listed companies have higher analyst coverage compared to their peers listed elsewhere Bloomberg - Analyst Coverage 0 Factset - Analyst Coverage Source: Bloomberg, July Data includes international companies (by domicile) on the main markets of each exchange. 6

7 Listing in London facilitates creation of a global profile Hayward s Vallares Raises $2.2 Billion in IPO Vallares Plc, the investment vehicle backed by former BP Plc Chief Executive Officer Tony Hayward, raised 1.35 billion pounds in a share sale today, more than originally planned. 17 June 2011 Bayfield Energy to list on AIM The company, which has key assets in Trinidad and Tobago, wants to float by early July, joining in the rash of oil and gas listings this year. Hywel John, chief executive of Bayfield Energy, said: We are offering investors the opportunity to share in significant potential upside as we rapidly cycle the funds we raise in the initial public offering process through the business. 18 June 2011 Glencore narrows IPO range to 520p-550p It expects to become only the third company and the first in 25 years to enter the blue-chip FTSE 100 index on the first day of trading. The flotation, led by Citigroup, Credit Suisse and Morgan Stanley, is the largest in the London Market and the third largest in Europe. 16 May 2011 Phosagro to list up to 10% of shares in London IPO Russian fertilizer producer Phosagro is planning to list up to 10% of its stock at the initial public offering of its shares, which will be traded at the London Stock Exchange. 7 July 2011 Shares in Russia's Mail.ru have surged more than 30% on their London debut, after the internet group raised $912m ( 563m) in a stock market flotation. 5 November 2010 African Potash starts trading on AIM Investment vehicle African Potash has joined the AIM today with a million placing in an effort to take advantage of huge opportunities in potash exploration in Africa. 30 Sept 2011 Ophir Energy IPO book oversubscribed-sources. Oil and gas company Ophir Energy s planned initial public offering on the London Stock Exchange is oversubscribed, making it well placed to succeed with its flotation plans. 7 July 2011 At the top end of its indicated price band, Polymetal would enjoy a market capitalisation of almost 4bn, catapulting it into the FTSE 100 index. 25 Oct

8 A London listing will enable our issuers to attract investors from around the world Top 50 UK investors holdings, by region Asia Pacific 11% Lat Am 3% EMEA (ex UK) 24% Top 50 US investors holdings, by region EMEA (ex UK) 7% Lat Am, 6% Top 50 Hong Kong investors, by region EMEA 4% North America Lat Am 3% 2% UK 41% North America 21% Asia Pacific 6% UK 4% North America 77% Asia Pacific ex China 33% China 58% Int l equity assets under management, by financial centre USD bn London New York Canada Paris Hong Kong Frankfurt Sources: Ipreo as at December

9 London remains committed to international equity Equity assets under management by financial centre Other financial centres CAGR +0.2% Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 London NY Frankfurt Paris HK Boston Chicago LA San Francisco Source: Ipreo, December 2012 and IMA 9

10 London as additional pool of liquidity Sberbank trading comparisons London vs. Moscow (April 2011 March 2013) Source: Ipreo, December 2012 and IMA 10

11 After IPO - market support for int l issuers Comparative performance of domestic and international issuers Market cap-weighted post IPO performance -12mth 30% 20% 10% 0% -10% -20% -30% 108% UK post-ipo performance Domestic vs International London Domestic London International Market cap-weighted post IPO performance - 12mth 40% 30% 20% 10% 0% -10% -20% -30% US post-ipo performance Domestic vs International* Market cap-weighted post IPO performance - 12mth -10% -20% USA Domestic USA International -30% 30% 20% 10% 0% Hong Kong post-ipo performance Domestic vs International HK Domestic HK International Source: Dealogic, February 2013 Distinction between international & domestic is determined by country of primary business operations (headquarters) provided by Dealogic * All post IPO performance figures in graph have been market cap weighted for each year. Where less than 12 months have elapsed since IPO the performance is taken till the end of last month figures for US IPOs exclude Facebook. 11

12 Emerging markets issuers at London Stock Exchange enjoy deep liquidity pools Average Daily Value Traded / Free floating market cap Top IOB traded securities Top FTSE 100 traded securities MAIL.RU GROUP LD 0,88% GLOBALTRANS 0,69% SBERBANK OF RUSSIA 0,47% JSC VTB BANK 0,47% MMC NORILSK NICKEL 0,40% LUKOIL OAO 0,38% X5 RETAIL GROUP 0,38% JSC URALKALI 0,36% GAZPROM OAO 0,34% OJSC MAGNIT 0,29% OAO SEVERSTAL 0,29% OAO NOVATEK 0,22% OJSC MEGAFON 0,19% OJSC NOVOLIPETSK 0,18% OAO TATNEFT 0,16% 0,00%0,20%0,40%0,60%0,80%1,00% GDRs GLENCORE INT PLC 0,44% XSTRATA PLC 0,41% AVIVA PLC 0,39% BARCLAYS PLC 0,36% LLOYDS BANKING 0,32% ANGLO AMER PLC 0,30% ROYAL BK SCOTLAN 0,29% SHIRE PLC 0,29% RIO TINTO PLC 0,28% TULLOW OIL 0,28% ARM HOLDINGS 0,26% WPP PLC 0,23% SABMILLER PLC 0,23% BG GROUP PLC 0,22% TESCO PLC 0,22% 0,00%0,10%0,20%0,30%0,40%0,50% Premium listing of shares Source: Bloomberg, March

13 Listing in London continues to be the most cost effective option amongst major exchanges Comparison of underwriting costs Cost of listing in London is further reduced by: Regulation which is widely tested and balanced Timing of the admission process is clearly communicated Regulator which provides consistent and predictable comments Direct communication with the regulator and the Exchange Highly competitive legal services which have deep experience in listing process 8,00% 7,00% 6,00% 5,00% 4,00% 3,00% 2,00% LSEG NYSE Euronext (US) HKSE NASDAQ 1,00% 0,00% Based on gross underwriting fees (excluding AIM). Source: Dealogic, November

14 London: a stable and supportive regulatory environment without uncertain litigation risk and costs Higher personal & litigation risk for directors and companies listed in the US than in the UK D&O insurance costs are typically 3x more expensive for a company listed in the US (1) US is a significantly more litigious environment than the UK and non US companies are potentially exposed to greater uncertainty and a non-domestic bias Managing this risk is costly and can be an unnecessary distraction for management and difficult to manage from a distance. This is another factor in many non US companies choosing to relocate their HQ and/or move significant operating assets to the US D&O costs for 35 Largest FTSE 100 companies Price per Million (GBP) Average: GBP 14, Average: GBP 4,752 0 Largest Smallest Market Cap (GBP bn) (1) Analysis performed on primary D&O Price per Million (GBP) of FINPRO UK's Non-FI FTSE 100 Companies listed from left to right in descending market cap order 14

15 Indicative IPO transaction timeline Company Financial Legal Investors and distribution PR - 6 months -3 months Tax planning IFRS preparation (if needed) Working capital statements Long form financials Forecasts and offer size agreed Suitability and due diligence Transaction structure and board preparations Discussions with existing shareholders Due diligence Engage with sponsor (if applicable) Audit Financials and valuations Admission Document drafting - 1 month UKLA approval stage Early engagement with the UKLA Memorandum and articles of association / underwriting agreement/ Board minutes/ depositary agreement and other documents Investor education and business case Test marketing Early engagement with the UKLA Preparation of Pre marketing research Pricing model Company profile and story Roadshow Bookbulding Prospectus approved Pricing LSE Preliminary discussions and on-going support Admission to trading

16 London Stock Exchange offers a diverse range of markets Offering choice to issuers: The choice of market will depend on a number of factors including: Stage in a company s development Securities admitted to official list (maintained by UKLA) Securities not admitted to official list (maintained by UKLA) Complexity of the offer and securities issued Target investors Company s size Company's strategy and objectives EU Regulated markets Exchange Regulated markets Main Market LSE is also about to launch a new High Growth Segment tailored to high growth companies 16

17 Main Market Premium Listing of commercial companies Key eligibility requirements Key continuing obligations Listing Rules Compliance with the Listing Principles (LR 7) Appointment of a sponsor 75% of the business to be supported by a revenue earning track record Control over the majority of the entity s assets Independent business as main activity Unqualified working capital statement Minimum 25% shares in public hands Minimum market capitalisation GBP 700,000 Free transferability of securities Eligible for electronic settlement Accounts 3 years of audited financial information* Latest accounts no more then 6 months old (Interims included if accounts more than 6 months old)* EU IFRS or equivalent Corporate Governance UK Corporate Governance Periodic Reporting Annual Financial Report (four months after the end financial period) Half yearly financial report Interim Management Statement Significant transactions (class tests) Listing Rules Pre-emption rights extended to existing shareholders Model code Disclosure and Transparency Rules Corporate governance Inside information made public without delay List of insiders Major shareholder notification Directors Dealings Related party transactions UK Corporate governance comply or explain Statement in the annual report Sponsor To be retained at all time Prospectus Prospectus approved by the UKLA Admission & Disclosure Standards Compliance with the London Stock Exchange's Admission and Disclosure Standards *Does not apply to mineral or scientific research companies 17

18 Main Market Standard Listing of Depositary Receipts Key eligibility requirements Key continuing obligations Listing Rules Minimum 25% shares in public hands Minimum market capitalisation GBP 700,000 Free transferability of securities Eligible for electronic settlement Accounts 3 years of audited financial information (or such shorter period the company was in operation) Latest accounts no more than 18 months old (if audited interims included) or 16 months old (if undated interims included). If accounts are older than 9 months old interims must be included. EU IFRS or equivalent Periodic Reporting Disclosure and Transparency Rules Corporate governance Annual Report (four months after the end financial period)* Annual Information Update List of insiders Inside information made public without delay Domestic Corporate governance applied Statement in the annual report Corporate Governance Domestic corporate governance code applies Prospectus Prospectus approved by the UKLA Admission & Disclosure Standards Compliance with the London Stock Exchange's Admission and Disclosure Standards * 6 months for DR issuers admitted on PSM 18

19 Conclusions The most international exchange * in the world With close to 600 international companies from over 110 countries, listed and traded on its markets. Differentiated trading platforms offers tailored solutions to maximise liquidity and investor participation The London Stock Exchange offers a wide choice of routes to market. The choice of markets is open equally to UK and international companies. We provide cost-efficient access to the world s largest pool of international equity assets Over USD 2.4 trillion of equities are managed out of London, with more than USD 1.4 trillion invested in international equity assets, more than any other major financial centre *. London Stock Exchange Group operates one of the most liquid equity marketplaces globally London Stock Exchange has close to 3,000 companies quoted on its markets and over 500 member firms. *By number of international companies. Source: IPREO, Q Please refer to the end of the presentation for legal disclaimer 19

20 Disclaimer This document has been compiled by the London Stock Exchange plc (the Exchange ). The Exchange has attempted to ensure that the information in this document is accurate, however the information is provided AS IS and on an AS AVAILABLE basis and may not be accurate or up to date. The Exchange does not guarantee the accuracy, timeliness, completeness, performance or fitness for a particular purpose of the document or any of the information in it. The Exchange is not responsible for any third party content which is set out in this document. No responsibility is accepted by or on behalf of the Exchange for any errors, omissions, or inaccurate information in the document. No action should be taken or omitted to be taken in reliance upon information in this document. The Exchange accepts no liability for the results of any action taken on the basis of the information in this document. All implied warranties, including but not limited to the implied warranties of satisfactory quality, fitness for a particular purpose, non-infringement, compatibility, security and accuracy are excluded by the Exchange to the extent that they may be excluded as a matter of law. Further, the Exchange does not warrant that the document is error free or that any defects will be corrected. To the extent permitted by applicable law, the Exchange expressly disclaims all liability howsoever arising whether in contract, tort (or deceit) or otherwise (including, but not limited to, liability for any negligent act or omissions) to any person in respect of any claims or losses of any nature, arising directly or indirectly from: (i) anything done or the consequences of anything done or omitted to be done wholly or partly in reliance upon the whole or any part of the contents of this document; and (ii) the use of any data or materials in this document. Information in this document is not offered as advice on any particular matter and must not be treated as a substitute for specific advice. In particular information in the document does not constitute professional, financial or investment advice and must not be used as a basis for making investment decisions and is in no way intended, directly or indirectly, as an attempt to market or sell any type of financial instrument. Advice from a suitably qualified professional should always be sought in relation to any particular matter or circumstances. The contents of this document do not constitute an invitation to invest in shares of the Exchange, or constitute or form a part of any offer for the sale or subscription of, or any invitation to offer to buy or subscribe for, any securities or other financial instruments, nor should it or any part of it form the basis of, or be relied upon in any connection with any contract or commitment whatsoever. London Stock Exchange and the London Stock Exchange coat of arms device are registered trade marks of London Stock Exchange plc. Other logos, organisations and company names referred to may be the trade marks of their respective owners. March 2013 London Stock Exchange plc 10 Paternoster Square London EC4M 7LS Telephone +44 (0)