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Monday, 27 March, 2000, 20:22 GMT 21:22 UK
Markets race for dot.com cash

Investors worldwide rush for technology stocks

By BBC News Online's Orla Ryan

Time was that entrepreneurs had to persuade people to lend them money.

In the brave new world that is the internet age, lenders now compete to persuade entrepreneurs to allow them to be the ones that lend them money.

Many stock markets seem to be throwing away the rule book on prudent behaviour to ensure easier access to cash for internet start ups.

The pace of change in Europe has been forced by the imminent arrival of Nasdaq, the US technology exchange.

What do you want from a market?

The ideal market offers start-up companies a mix of things for their initial public offering.



European exchanges have to play catch-up with Nasdaq
These include reasonable cost, a good valuation, local and international placement and a balanced investor profile.

An investor's ideal market offers access to blue chips and growth companies, access to new offerings and importantly liquidity - the knowledge that the market is large and active enough that they can always find a buyer if they want to sell.

We are the market for you

Last week, four of the big markets arrived in Cambridge - the heart of Silicon UK - to sell themselves to internet start-ups.

Nasdaq Europe, the pan-European stock market Easdaq, the London Stock Exchange with its Techmark index and Euro.nm - a grouping of European stock markets led by Germany's huge successful Neuer Markt - sought to explain why the budding entrepreneur should list with them.

It is in part the arrival of Nasdaq - widely expected to open in London either late this year or early next year - that is making the exchanges more willing to relax some of their listing requirements.

"The effect of Nasdaq is accelerating the decision making process of many European bourses," Robert Thys, marketing director at Euro.nm, admitted.

Nasdaq's status as the granddaddy of the technology stock market seems assured.

With nearly 5,000 companies listed, it claims to have seen more dollar volume in 1999 than any exchange in history.

Companies continue to be attracted to the exchange, for, amongst other things, the high valuations it offers.

Blurring of national lines

The arrival of Nasdaq also comes at a time when the national boundaries in finance are falling in Europe.

Investment banks are global in reach and it is this, combined with the arrival of the euro, which has encouraged cross-border listings.

"Equity markets have traditionally operated very much along national lines," Vivienne Cassley of Easdaq, vice president, responsible for business development in the UK and Ireland, admitted.

But choosing the right market is more than just about raising cash, Ms Cassley said.


old London Stock Exchange
Old exchanges are out, high-tech computer-driven markets are in for dot.com companies
"The right exchange offers broad visibility and sector comparability, so the listing company can compare and be compared with their peers," Ms Cassley said.

Easdaq requires dotcoms to float 20% of their stock, but other than that it is short of requirements.

"You don't have to have a trading record, you don't have to be making a profit," Ms Cassley said.

It has 58 listed companies and offers easy dual listing with Nasdaq, boat market officials.

For the London Stock Exchange, one of its key selling points will always be the city in which it is based.

"43% of all European equity funds are managed out of London," Theresa Wallis, head of companies business development at the London Stock Exchange said.

With Aim, the Alternative Investment Market, and Techmark, it hopes to secure its future as a home for high-growth companies, some of whom can then graduate to the grown-up blue chip index.

Techmark currently has 195 listed companies.

But even Euro.nm, the pan-European grouping of markets which includes Frankfurt's Neuer Markt, questions how likely companies are to cross borders.

"Capital has no passport, but equities have an ID card," Mr Thys joked, reaffirming his belief that companies are still most likely to list in their country of origin.

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See also:

04 Nov 99 | The Economy
UK launches Nasdaq rival
05 Nov 99 | The Company File
Nasdaq to launch in London
05 Nov 99 | The Economy
Q & A: Nasdaq heads for London
30 Oct 99 | Business Basics
London Stock Exchange
06 Dec 99 | Business
German exchange to demutualise
02 Feb 00 | Business
Stock Exchange to sell own shares
15 Mar 00 | Business
Stock exchange votes to go public
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