London Stock Exchange to launch rival to Nasdaq

THE LONDON Stock Exchange is poised to launch a technology market modelled on America's highly successful Nasdaq market and the more recent German Neuer Markt.

Following nearly a year of internal debate within the LSE's bureaucracy, Gavin Casey, chief executive, will announce the move within the next few weeks as part of a package of initiatives to modernise the Exchange in the wake of last month's decision to demutualise.

Other measures to overhaul the Exchange's practices in response to the growing competitive threat from rival markets are also in the pipeline. The new market is expected to allow genuine start-up companies with no profits record to list, provided they meet stiff disclosure standards.

It is also likely to allow companies to sell less than the minimum 25 per cent required by the LSE's main board, and to come back and raise further capital through equity sales without the two-year lock-ins which the LSE currently requires.

The Exchange hopes to kick -start the new market by persuading some of the information technology and Internet stocks quoted in London to list on the new technology exchange.

The decision to launch a market tailored to the needs of technology companies follows pressure from the big City investment banks and private equity groups who have been warning for some time that London risks missing the boat over Internet stocks because of the lack of a suitable growth market on which to list.

The Government has also been taking a close interest in the matter because of its desire for the City to do more to fund a viable technology sector in the UK.

There is also a large pool of growth companies from countries like India and Israel who have tended to look to Nasdaq as their natural home but who could be persuaded to come to London if conditions were right.

Although London succeeded in keeping Freeserve, Dixons' Internet service provider which opted for a joint London and Nasdaq listing, other potentially interesting UK hi-tech companies have found it easier to raise money from US investors via Nasdaq, or like Dr Solomon, the anti-virus software firm, have opted for European alternatives like Easdaq which have more of a technology cachet.

Germany's Neuer Markt has seen some 60 new issues so far this year, compared with just a handful in the UK.

Earlier this week Trintech, an Irish e-commerce payments systems company, announced plans to list on Nasdaq and the Neuer Markt in September.

Bankers have cited Razorfish, the web design consultancy and China.com, the Chinese Internet portal, as examples of companies that have listed on Nasdaq which could have found a ready investor market in the UK.

The strong appetite for Freeserve, particularly among retail investors, has raised hopes in the City that other UK Internet start-ups like LastMinute.Com may list here.

However, many fear that the delay in overcoming hostility from the traditionalists within the Exchange may mean that it is too late. Disillusionment with the sector is appearing in some sections of the investment community following the steep fall in Internet stock prices in the US and Germany recently.

Nasdaq now boasts 5,000 companies with an aggregate capitalisation of some $3 trillion.

"It is already so far ahead, that I cannot see how London can ever hope to catch up," one investment banker said.

Outlook, page 17

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
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.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee