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, 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
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Recruitment Genius: Online Customer Service Administrator

£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

Recruitment Genius: Digital Marketing Executive

£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before