London Stock Exchange

The London Stock Exchange is a stock exchange located in the City of London in the United Kingdom. As of December 2011, the Exchange had a market capitalisation of US$3.266 trillion (short scale), making it the fourth-largest stock exchange in the world by this measurement (and the largest in Europe). The Exchange was founded in 1801 and its current premises are situated in Paternoster Square close to St Paul's Cathedral in the City of London. The Exchange is part of the London Stock Exchange Group.

Issuer services help companies from around the world to join the London equity market in order to gain access to capital. The LSE allows company to raise money, increase their profile and obtain a market valuation through a variety of routes, thus following the firms throughout the whole IPO process.

The London Stock Exchange runs several markets for listing, giving an opportunity for different sized companies to list. International companies can list a number of products in London including shares, depositary receipts and debt, offering different and cost-effective ways to raise capital. In 2004 the Exchange opened a Hong Kong Office and has attracted more than 200 companies from the Asia-Pacific region.

For the biggest companies exists the Premium Listed Main Market. This operates a Super Equivalence method where conditions of both the UK Listing Authority as well as London Stock Exchange’s own criteria have to be met. The largest IPO (Initial Publical Offering) on the Exchange was completed in May 2011 by Glencore International plc. The company raised $10bn at admission, making it one of the largest IPO ever.

In terms of smaller SME’s the Stock Exchange operates the Alternative Investment Market (AIM). For international companies that fall outside of the EU, it operates the Depository Receipt (DR) scheme as a way of listing and raising capital.

Amongst the benefits of joining one of the Exchanges markets are:

- Providing access to capital for growth and raise finance for further development

- Both broadening the shareholder base and creating a market for the company’s share

- Placing an objective market value on the company’s business

There are also two specialised markets:

Professional Securities Market This market facilitates the raising of capital through the issue of specialist debt securities or depositary receipts (DRs) to professional investors. The market operates under the status as a Recognised Investment Exchange, and by July 2011 it had 32 DRs, 108 Eurobonds and over 350 Medium Term Notes.

Specialist Fund Market Is the London Stock Exchange dedicated market, designed to accept more sophisticated fund vehicles, governance models and security. It is suitable only for institutional, professional and highly knowledgeable investors. The Specialist Fund Market is an EU Regulated Market and thus securities admitted to the market are eligible for most investor mandates providing a pool of liquidity for issuers admitted to the market

There are currently 2,938 companies from over 60 countries listed on the London Stock Exchange, of which 1151 are on AIM, 44 on the Professional Securities Market and 10 on the Specialist Funds Market. By June 2011, the AIM had 56 companies as per country of operations from Africa, 41 from China, 26 from Latin America, 23 from Central & Eastern Europe and 29 from India & Bangladesh, making it one of the world’s leading growth markets. Since its launch in 1995, more than £67 billion have been raised on AIM.The total market value of these companies is £3.9 trillion.

The daily turnover traded in July 2011 was £4.4 billion (€5.0 billion) and the daily number of trades 611,941. The LSE’s share of trading in the UK lit order book trading was 62.2%.

The London Stock Exchange today offers trading in more emerging markets exchange traded funds (ETFs) than any other exchange in the world. There were a total of 158 emerging market ETFs listed on the Exchange in May 2011 compared with 126 on the New York Stock Exchange (NYSE Arca) and 93 on Deutsche Boerse.

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