Derek Pain: There may be fringe benefits now Plus Markets is on sale

No Pain, No Gain

Is Plus, the City's rather sleepy fringe share market, set for a new, more active lease of life? I ask this question following the surprise announcement that its parent company has, in effect, put itself up for sale. There is, of course, a danger that the process could lead to the little stock market suffering acute damage. But I don't think that will happen. There is no doubt the Plus share-trading facility deserves to continue and could grow much stronger under new ownership.

The Plus market, where about 160 shares and bonds are traded, is owned by an AIM-traded company, Plus Markets. To many investors outside the City it is by far the most important segment of the group. But the company also offers a derivatives market and the ability to deal in a vast range of shares including many foreign stocks as well as fully listed and AIM shares.

It has spent huge sums developing what it hoped would be a full-blown stock exchange, a miniature version of the London Stock Exchange. However, its ambitious expansion has produced losses with profits not even in sight.

Certainly Plus has strayed a long way from its original structure. It was set up by a veteran City stockjobber, John Jenkins, when the LSE, in its infinite wisdom, decided to end its off-market, matched-bargains operation. Mr Jenkins, whose father launched a jobbing firm just after World War Two, created a market for the displaced constituents that did not want a quote but, as public companies, felt the need for a share-trading facility. His fledgling platform was also aimed at young, ambitious companies with cash calls in mind. He called his venture Ofex (Off Exchange).

As a fringe market, under the Jenkins guidance, Ofex attracted many groups, including such heavyweights as National Car Parks and Weetabix. Both have disappeared from the market. The fringe player had its problems but arrived on AIM and the shares topped 40p. However, the Jenkins AIM reign was short lived and new investors (with pots of money) and managers moved in. In 2007, its shares were above 30p. And, to emphasise that the company's new role would be much more than running a fringe share market, the name Plus was adopted.

But the group's ambitions, which overshadowed the original Ofex market, failed to generate commercial success. Losses piled up. The last recorded year's deficit, not bad by Plus standards, was £5.7m. In the first six months of last year, the last figures available, the loss was reduced from £2.5m to £1.4m.

Discontent grew among the group's backers. In October Amara Dhari Investments called a shareholders' meeting aimed at removing chairman Giles Vardy and electing Simon Brickles, who developed AIM and had already enjoyed a stint at Plus, to the board. City veteran Mr Vardy departed and the meeting was called off.

Now the sale process is under way. Certainly the fringe element should attract considerable interest with, I suspect, a number of City firms knocking on the Plus door. But whether there will be much interest in acquiring the rest of the group remains to be seen. Last year there was a conditional approach for the derivatives business but the mini-stock exchange, which has been described as a platform for City professionals to play around at minimum cost, could have little attraction.

Amara Dhari, a Kuwaiti group with 17.2 per cent, will have a major say in the fate of Plus. Interestingly it says the sale decision is "regrettable". The City's main representative on the shareholders' register is merchant bank Close Brothers with a near-20 per cent stake. serial investor, Bruce Rowan, who has built a 15.6 per cent interest largely as Plus shares have collapsed into the penny-dreadful category, is another important player. Mr Rowan, noted for his involvement with small caps, was quoted as describing the shares as a "gambling stock" during his early days on the Plus scene. As I write the shares are around 1p, providing a £3.2m capitalisation.

The Plus operation has in recent years become an authorised stock exchange. But official recognition has not served it well. Perhaps it should have stayed on the fringe.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Life and Style
tech

Sales of the tablet are set to fall again say analysts

News
A Brazilian wandering spider
news

World's most lethal spider found under a bunch of bananas

Life and Style
fashion

British supermodel and hitmaker join forces to launch a 'huge song'

News
news

The Duke and Duchess of Cambridge announce they are set to welcome second child in spring

PROMOTED VIDEO
Life and Style
gaming

I Am Bread could actually a challenging and nuanced title

Sport
Mario Balotelli pictured in the win over QPR
footballInternet reacts to miss shocker for Liverpool striker
Voices
Sol Campbell near his home in Chelsea
voices
News
i100
News
Kimi the fox cub
newsBurberry under fire from animal rights group - and their star, Kimi
Sport
Fans of Palmeiras looks dejected during the match between Palmeiras and Santos
footballPalmeiras fan killed trying to 'ambush' bus full of opposition supporters
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Customer Service Executive / Inbound Customer Service Agent

    £18 - 23k + Benefits: Guru Careers: We are seeking a Customer Service Executiv...

    ASP.NET Web Developer / .NET Developer

    £60 - 65k + Benefits: Guru Careers: We are seeking a ASP.NET Web Developer / ....

    Operational Risk Manager - Asset Management

    £60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...

    Project Coordinator - 12 month contract

    £27000 - £32000 Per Annum: Clearwater People Solutions Ltd: Our large charity ...

    Day In a Page

    Oscar Pistorius sentencing: The athlete's wealth and notoriety have provoked a long overdue debate on South African prisons

    'They poured water on, then electrified me...'

    If Oscar Pistorius is sent to jail, his experience will not be that of other inmates
    James Wharton: The former Guard now fighting discrimination against gay soldiers

    The former Guard now fighting discrimination against gay soldiers

    Life after the Army has brought new battles for the LGBT activist James Wharton
    Ebola in the US: Panic over the virus threatens to infect President Obama's midterms

    Panic over Ebola threatens to infect the midterms

    Just one person has died, yet November's elections may be affected by what Republicans call 'Obama's Katrina', says Rupert Cornwell
    Premier League coaches join the RSC to swap the tricks of their trades

    Darling, you were fabulous! But offside...

    Premier League coaches are joining the RSC to learn acting skills, and in turn they will teach its actors to play football. Nick Clark finds out why
    How to dress with authority: Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear

    How to dress with authority

    Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear
    New book on Joy Division's Ian Curtis sheds new light on the life of the late singer

    New book on Ian Curtis sheds fresh light on the life of the late singer

    'Joy Division were making art... Ian was for real' says author Jon Savage
    Sean Harris: A rare interview with British acting's secret weapon

    Sean Harris: A rare interview with British acting's secret weapon

    The Bafta-winner talks Hollywood, being branded a psycho, and how Barbra Streisand is his true inspiration
    Tim Minchin, interview: The musician, comedian and world's favourite ginger is on scorching form

    Tim Minchin interview

    For a no-holds-barred comedian who is scathing about woolly thinking and oppressive religiosity, he is surprisingly gentle in person
    Boris Johnson's boozing won't win the puritan vote

    Boris's boozing won't win the puritan vote

    Many of us Brits still disapprove of conspicuous consumption – it's the way we were raised, says DJ Taylor
    Ash frontman Tim Wheeler reveals how he came to terms with his father's dementia

    Tim Wheeler: Alzheimer's, memories and my dad

    Wheeler's dad suffered from Alzheimer's for three years. When he died, there was only one way the Ash frontman knew how to respond: with a heartfelt solo album
    Hugh Bonneville & Peter James: 'Peter loves his classic cars; I've always pootled along fine with a Mini Metro. I think I lack his panache'

    How We Met: Hugh Bonneville & Peter James

    'Peter loves his classic cars; I've always pootled along fine with a Mini Metro. I think I lack his panache'
    Bill Granger recipes: Our chef's heavenly crab dishes don't need hours of preparation

    Bill Granger's heavenly crab recipes

    Scared off by the strain of shelling a crab? Let a fishmonger do the hard work so you can focus on getting the flavours right
    Radamel Falcao: How faith and love drive the Colombian to glory

    Radamel Falcao: How faith and love drive the Colombian to glory

    After a remarkable conversion from reckless defender to prolific striker, Monaco's ace says he wants to make his loan deal at Old Trafford permanent
    Terry Venables: Premier League managers must not be allowed to dictate who plays and who does not play for England

    Terry Venables column

    Premier League managers must not be allowed to dictate who plays and who does not play for England
    The Inside Word: Brendan Rodgers looks to the future while Roy Hodgson is ghost of seasons past

    Michael Calvin's Inside Word

    Brendan Rodgers looks to the future while Roy Hodgson is ghost of seasons past