There is only one topic being talked about in the darkest corners of the City: rumors that Nasdaq, the largest stock exchange in the United States, is snooping around London’s junior alternative investment market.
Insiders say that for several weeks there has been speculation that the American group is eager to close some type of agreement with the London Stock Exchange Group (LSEG) to buy AIM and strengthen its European operations.
Nasdaq executives are said to believe the timing could not be more fortuitous, with the LSE itself under pressure after a series of high-profile corporate defections to Wall Street as the number of companies delisting from AIM it accelerates.
So far this year, only one company has joined AIM, compared to ten that listed last year.
And the latest LSEG data shows that over the last year, the number of companies listed on AIM has fallen from 70 to 738 at the end of March, a drop of almost 10 per cent. In 2007 there were 1,700 companies.
Target: Insiders say there has been speculation for several weeks that Nasdaq is eager to reach some kind of deal with the London Stock Exchange Group to buy Aim.
Among the main criticisms from AIM advisers – known as nomads – are that the cost of listing for young, dynamic companies is too high, around £500,000 at last count, and that regulations are too strict and onerous.
Staying private is becoming the preferred option for small and medium-sized businesses (SMEs).
It is not known if an approach has been made to the BVL or if the interest is still at an earlier stage.
Nasdaq has yet to comment despite attempts to contact its European head office in Stockholm.
What is certain is that Nasdaq’s European operations have been growing rapidly. Adding AIM, despite its problems, would put rocket boosters on its network, which includes seven exchanges, including those in Sweden, Denmark, Iceland and Finland.
More than 1,000 companies are listed on the European Nasdaq exchanges and employs 1,600 people in 14 European countries.
Nasdaq has always had big ambitions in the UK. Those with long memories will remember that the US stock market launched two hostile takeover bids for LSE itself, the last in 2007.
Nasdaq acquired the Swedish group OMX, using Stockholm as a springboard into European markets.
It may well be that the latest rumors are overly excited gossip. However, the mere fact that such talks are taking place is indicative of growing fears about the city’s long-term future as one of the world’s most international markets.
Here is a shocking figure that shows the decline. In 2000, UK-listed shares accounted for 11 per cent of the MSCI World Index, which tracks more than 1,500 companies representing the majority of the world’s stock markets by value. Today, that figure has dropped to 4 percent.
Citi’s research shows that the MSCI UK index, which tracks 80 of the largest UK-listed companies, is trading at a discount of almost 40 per cent to the US index of 625 companies.
The reason is the extraordinarily low valuations applied to UK companies – large and small – and one of the factors driving the recent spate of acquisitions, whether by US companies or private equity.
Some economists estimate that UK shares are undervalued by at least 20 per cent compared to international peers.
Nick Train, one of the UK’s top fund managers and stock pickers, went further earlier this week, describing valuations of British companies as “extremely low” and that one way to wake up investors would be if an acquisition of a blue giant from the United Kingdom will be launched. chip.
Train, whose fund has a 4 per cent stake in the LSE, added: “Sometimes it takes a cathartic event to turn the tide.”
He is correct. Just the rumors about possible interest in AIM should be an even bigger wake-up call. Removing AIM from the LSE could be the way to restore its reputation. It shouldn’t be the Americans who did it.
Two-way traffic
Bravo to French JD Sports boss Regis Schultz for being brave enough to take the FTSE 100 company across the Atlantic with its deal to buy sportswear chain Hibbett.
And it’s a big deal, doubling the number of stores owned by the sportswear retailer in the United States to 2,100.
The history of UK retailers in the US is not very good. Think Marks & Spencer and Tesco.
But Schultz has already left a mark. What’s more, Hibbett is listed on the New York Stock Exchange.
So Wall Street is one down.
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