Ofex, the lightly regulated junior stock market, pulled off two dramatic coups yesterday, signing up Winterflood Securities as a market maker for its shares and hiring the head of the rival AIM market.
Winterfloods will make a market in all 165 Ofex companies, introducing competitive pricing for the first time in a move that should make it cheaper and easier to trade Ofex-listed shares. And Simon Brickles, who has run the London Stock Exchange's second-tier market, AIM, since 2001, will join as a consultant, helping to market Ofex in the UK and overseas and to advise on corporate development.
Jonathan Jenkins, who with his sister Emma is joint managing director of Ofex, said he hoped the two developments would attract new institutional investors to the market. He said: "The biggest problem we have had is one of credibility, but to have attracted people of the calibre of Simon Brickles, and with the experience and the systems of Winterfloods, shows that we have listened to the investment community and want them to take us seriously. We are going to be more aggressive in our marketing from here."
Mr Brickles handed in his resignation at AIM last month and had been working his notice, but was put on gardening leave yesterday.
Winterfloods will come on board in the spring after new computer systems have been set up. Market-makers set share prices and guarantee that a stock can always be bought or sold. Until now, Ofex shares have had only one market-maker. This has been a source of resentment among small investors, particularly during the dot.com boom when the market attracted interest as the home of numerous start-up ventures, with many expressing suspicion over the trading prices being set.
When Ofex plc, the company that runs the eight-year-old market, was floated on AIM earlier this year, it promised to break the market-making monopoly of JP Jenkins, the stockbrokers that was formerly its parent company. Teather & Greenwood also make markets in some stocks, but do not currently compete with JP Jenkins. Ofex shares were up 2p to 22.75p yesterday.Reuse content