Marcus Cake

Grant Thornton conducts an annual review of global growth markets. The report confirms a number of key trends. Capital markets are becoming more global and less regional, financial centres and specialising and certain stock exchanges are growing strongly. The most popular growth exhanges are in UK (AIM), Singapore, Hong Kong and Canada. Companies are becoming increasingly comfortable listing on foreign exchanges. This is contributing the the rise of specialist financial centres and global growth stock exchanges ( Offshore stock exchanges in an internet era ; The rise of global capital markets ; Large stock exchanges decline, niche exchanges grow ). The internet provides investors with transparency and direct access to information. Many stock exchanges and their closed information networks will struggle to find a niche in a globally connected world and free flow of information ( Stock exchanges are deprecated! What? ). Globally distributed online networks are likely to provide the support for growth companies and growth exchanges ( The rise of specialist financial centres will be supported by online networks; Could an online network deliver a virtual Silicon Valley? ; Dubai can build unprecedented infrastructure, but will they come). Online networks will deliver the international companies, advisers and investors necessary to deliver liquidity to small exchanges that have been historically restricted to local business. Extracts from the press release and report are provided below. I encourage you to read the original.

New Global Growth markets guide, Grant Thornton International press release 30th July 2007

Extract:

• The most successful growth markets are raising more funds than some of their main market rivals and are progressing towards becoming international exchanges according to the new Global Growth Markets Guide, published today by Grant Thornton International.
• The guide is based on research that analysed the merits of the 41 stock markets competing to list growth company stocks. It also lists the top 48 largest main markets based on their 2006 performance. The growth markets analysed are those which have been in existence for at least four years, have more than 150 companies listed and a market capitalisation in excess of US$2billion.
• Some of the developments experienced by these markets include an overall upward trend in liquidity, general appreciation and the beginnings of cross-border consolidation between markets. The alliances of growth markets provide clients with the ability to trade in different time zones, but the real benefits will only become apparent when companies and investors feels as comfortable using a foreign exchange as a domestic exchange.
• Key performance details from the guide include:
  

• AIM has become the market of choice for growth companies, attracting more listings in 2006 than all of the other leading world markets combined.

• AIM and the TSX Venture Exchange have recorded market capitalisation increases of around 80%.
• AIM was the most successful growth market for fundraising during 2006. It accounted for around half of the total across all markets.
• The TSX-V, SESDAQ and GEM have experienced share trading increases (measured by value) of 126%, 104% and 96% respectively.

• In the past only the main markets could offer a home for foreign companies looking to list their shares abroad. But now we’re starting to see the growth markets offer a more attractive alternative, with more visibility, lower costs and more funds available for investment in some cases,” said Philip Secrett, International Director of Capital Markets.

the 2007 Global growth markets guide, Grant Thornton International, July 2007
Extract:

• At the end of 2006, there were 41 growth markets around the world - 19 in Europe, 15 in Asia Pacific, three in Africa and four in the Americas.
• Growth markets are aimed at younger and smaller companies with high growth potential. This contrasts with the main markets which typically target larger, more established companies. Smaller, fledgling companies can suffer on main markets through comparisons with better resourced and larger companies, resulting in a low or poor profile.
• Some growth markets like to claim that they are sector rather than geographically based and that they attract similar companies from across the world. In reality, growth markets predominantly list domestic stocks only. For most small companies, opportunities to raise money on an international stock exchange are limited.Companies are often drawn to international exchanges due to their perceived brand value rather than for purely commercial reasons. There is also a widespread and sometimes mistaken belief that higher valuations can be obtained by going to an international stock market.

Click here to download the 2007 Global growth markets guide.

Click here for the 2006 Global growth markets guide.