London Stock Exchange Chief Executive, Clara Furse, seems to be one of those people with a press induced suffix. Like the person who occupies the position of director general at the CBI, whether it be Sir Digby Jones or Richard Lambert, the press always seems to prefix the word ‘furious’. For example a furious Sir Digby Jones said….Ms Furse seems to have a similar fate, it’s just that in her case the word is formidable… It’s not uncommon for the UK press to apply such titles to female bosses - but in the case of Ms Furse, she will need all of her formidability over the coming weeks.
The NASDAQ is closing in; it already has a 28.75 percent stake in the LSE, and now says it only wants to up its share to 51percent - see Wednesday’s story. So with the US exchange so close to victory, it’s been revealed that there will apparently be no job for the formidable one. In a recent filing, a NASDAQ statement said: “Nasdaq will seek the participation of existing members of the LSE board, in particular the LSE chairman, on the new independent LSE board. In any event, Nasdaq is confident that it can recruit appropriate individuals to form the remainder of the independent LSE board.” And that had the warning bells ringing, why did a statement that was so specific fail to mention Ms Furse? There can only be one explanation.
You can see why the NASDAQ is so keen to grab itself a slice of London’s zone of Sarbanes Oxley free trading. According to a report published this morning by Ernst and Young, the London Stock Exchange accounted for 15 percent of all IPOs across the globe so far this year. Only Hong Kong performed better than that. And of the top ten IPOs seen in 2006, three were in London. Yet, the US could only manage one, that was MasterCard, languishing in eighth place- and that wasn’t the NASDAQ - rather it was listed on the rival Dow Jones.
But if NASDAQ is successful, it has been speculated that we could see an end to AIM. Perhaps the AIM market is overtly competitive with areas of the NASDAQ and, or so it is understood, AIM is not an especially profitable area for its parent company.
More bad news came for AIM yesterday, with a story in yesterday’s Sunday Telegraph, quoting a letter from Simon Littlewood of London Asia Capital, that said: “AIM is trying to become an international market on the cheap, with advisers happy to charge inflated fees for a listing but not willing to invest in the infrastructure required to ensure investors’ money is protected.”
Yet, the same newspaper also told us more than 20 Indian firms are expected to float on AIM next year, raising £2.5 billion.
The AIM market might not be as profitable as its bigger sister, - but, for the LSE it could be useful for spotting talent, and getting this future potential under the wing. Companies from the likes of Russia and India may have been using it as a cheap way to raise money, but in the long run, some of these companies may well be promoted to the ranks of London’s great and good, with main listings. Any whiff that a NASDAQ bid could spell curtains for this market is potentially very serious.
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