The Week Ahead: Easdaq makes strides using outmoded quote-driven system

As the Stock Exchange prepares for next month's order-driven share trading revolution, a fledgling computerised rival, Easdaq, makes headway using the near-redundant quote-driven system.

Easdaq, still little known, is, in effect, the European version of Nasdaq, the highly successful US computerised market famous for its Bill Gates involvement. Like John Jenkins' fringe Ofex market, Easdaq was created as a result of Exchange rationalisation.

It was born out of the study which followed the decision to kill the old Unlisted Securities Market. The time was then ripe, says Easdaq's chairman, Stanislas Yassukovich, former head of Merrill Lynch's European operations, to launch a market "dedicated to entrepreneurial, high-growth companies with pan-European business aspirations". Its dream is to find another Bill Gates-like Microsoft giant.

The market made its debut nearly a year ago. First recruit was a British company, Dr Solomon's, producing anti-virus software products. There are now 15 constituents with Debonair, the airline, joining Dr Solomon's as the British contribution.

Companies are traded in the currency of their choice. Dr Solomon's opted for US dollars; Debonair for sterling. Value of the market is near to $3.35bn. Turnover so far clocked up is around $650m.

Shares of Dr Solomon's and Debonair have performed well. The computer virus group was floated at $17 and closed at $25.75 on Friday; Debonair arrived at 450p; it stood at 620p at the end of the week.

Other constituents include Esprit Telecomes, trading in Austrian schillings; Chemunex, a French biotech business which has attracted a buy recommendation from Nomura; and Topcall, another Austrian player, which has also won a London buy accolade - from Credit Lyonnais Laing.

Easdaq has an array of shareholders, none with substantial stakes. They range from Nasdaq, with around 4 per cent, the UBS securities giant, stockbroker Beeson Gregory and former Tory defence minister Sir John Nott.

The Exchange's order-driven system is due to be launched on 20 October, uncomfortably close, for some, to the anniversary of the 1987 crash. Trading will be confined to the 100 Footsie constituents. The shares in the supporting FTSE 250 index will be pulled in as soon as possible. In order-driven trading potential deals are computerised and displayed on an order book. They remain there until they can be fully or partly matched or withdrawn.

Quote-driven trading, which the Exchange seems likely to preserve for the 1,750 shares outside the top 350 as well as AIM shares, is the system adopted by Easdaq.

At least two market-makers must be prepared to deal in an Easdaq stock. They enter buying and selling prices on the market's trading terminals.

Says Easdaq: "Competition among market-makers produces efficient pricing and provides the market with the capacity to absorb large increases in volume without trading halts."

So far Easdaq has concentrated on institutional trades. It admits it has yet to come to terms with accommodating the private investor, but it seems to appreciate the need to cater for the small player and is likely to pay more attention as the market gathers pace and strength.

It is, however, possible for private investors to deal. And they do. They have to operate through their stockbroker who, if not an Easdaq member, has to put the order through one who, in turn, will trade with the market- makers. Cost of a small deal, say pounds 1,300, would be about pounds 30.

The Euro market does not see itself as a rival to "small-cap" markets such as AIM or the Nouveau Marche. In the fullness of time it could, however, emerge as a serious challenger to the Exchange and other big European markets (there are more than 20). It is modelled on the US Nasdaq market which from a small, slow start mushroomed into a market with a $17bn-a- day turnover, and happy to splash out $10m on a British television campaign.

Of course Easdaq does not, at least at this stage in its development, see itself rivalling national share markets. Still existing markets are largely composed of mature companies and Easdaq hopes it can steal their thunder by aiming to collect high-growth, entrepreneurial businesses - the companies of tomorrow.

As well as facing predictable and possibly fierce resistance from the more alive entrenched markets, it is having to contend with another European venture, Euro-NM, which covers Belgian, Dutch. French and German markets. But Easdaq's main challenge could come from its very inspiration, Nasdaq. On Sunday it launches another $10m television advertising campaign aimed at attracting British private investors. It is in talks with ShareLink and NatWest Securities.

If the Nasdaq campaign goes according to plan it will then be extended to Europe - a daunting prospect for existing markets.

Meanwhile, Manchester United is expected to announce its new television role when it produces year's figures tomorrow. It should score profits around pounds 27m, up from pounds 14.5m. The week's big hitter is Bank of Scotland, likely to offer pounds 357m against pounds 324m on Wednesday.

Engineer McKechnie should produce year's results of pounds 54.8m (pounds 50.3m) today.Northern Leisure should dance in with pounds 8.5m.

Suggested Topics
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
Sport
David Moyes and Louis van Gaal
football
News
Former Governor of Alaska Sarah Palin, left, with her daughter, Bristol
newsShe's 'proud' of eldest daughter, who 'punched host in the face'
Sport
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
rugby
PROMOTED VIDEO
News
A cabin crew member photographed the devastation after one flight
news
Life and Style
Carol O'Brien, whose son Rob suffered many years of depression
healthOne mother's story of how London charity Maytree helped her son with his depression
Life and Style
food + drink
Arts and Entertainment
The cover of Dark Side of the Moon
musicCan 'The Endless River' carry on the tradition? See for yourself
News
Rob Merrick's Lobby Journalists were playing Ed Balls' Labour Party MPs. The match is an annual event which takes place ahead of the opening of the party conference
newsRob Merrick insistes 'Ed will be hurting much more than me'
Voices
A new app has been launched that enables people to have a cuddle from a stranger
voicesMaybe the new app will make it more normal to reach out to strangers
News
Liam Payne has attacked the media for reporting his tweet of support to Willie Robertson and the subsequent backlash from fans
peopleBut One Direction star insists he is not homophobic
Life and Style
healthFor Pure-O OCD sufferers this is a reality they live in
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
Sexual health charities have campaigned for the kits to be regulated
healthAmerican woman who did tells parents there is 'nothing to be afraid of'
Life and Style
fashion
Arts and Entertainment
The John Peel Lecture has previously been given by Pete Townshend of The Who, Billy Bragg and Charlotte Church
musicGodfather of punk will speak on 'free music in a capitalist society'
News
peopleAt least it's for a worthwhile cause
News
Shoppers in Covent Garden, London, celebrate after they were the first to buy the iPhone 6, released yesterday
tech
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

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Quantitative Risk Manager

Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...

Day In a Page

A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments