Dublin foothold for American Stock Exchange

2 Sep 2004

Siliconrepublic.com has learned that the American Stock Exchange, America’s equivalent of London’s AIM, has established a presence in Dublin to interest Irish and European companies capable of achieving valuations of between US$50m and US$1bn in floating on the exchange to raise funds.

Over the years a number of Irish companies have been utilising London’s Alternative Investment Market (AIM) as a means of raising capital without pursuing flotations on larger exchanges like London, New York or Nasdaq. For example, last May Kerry-based travel software firm CNG raised €33m on its first day of trading on AIM.

Described as the “younger brother” of the New York Stock Exchange (NYSE), the American Stock Exchange (Amex) typically lists small to middle market companies with a market capitalisation of between US$50m and US$1bn. Approximately 600 companies are listed on the Amex and the average market capitalisation is US$125m.

Technology makes up around 13pc of Amex’s activity and other related sectors like communications and healthcare account for 5pc and 15pc of the exchange’s activity respectively. Sentiment toward technology-based listings were boosted in recent months by high profile listings of firms like Salesforce.com and Google.

Siliconrepublic.com learned yesterday that Amex has appointed a managing director of European Equities and has hired Dublin-based capital communications and advisory firm K Capital Source to support its efforts in Europe.

K Capital Source has a strong knowledge base of the European and North American finance markets and counts Jefferson Smurfit Group, C&C Group, Iona Technologies and Horizon Technology Group among its clients.

Jonathon Neilan of K Capital Source told siliconrepublic.com: “Amex is specifically focused on small to middle market companies and we are working with Amex to help it develop its perception and presence across Europe. Much of this will involve attracting European companies to list on Amex.”

Asked on why Ireland was chosen as the base from which to launch such a crusade, Neilan explained: “As a percentage of overseas companies listed in the US, Irish companies feature quite strongly. As well as this the Irish business world has a strong cultural affinity with the US. That being said, however, we will not be confining our efforts to Dublin. It just happens that K Capital Source is based in Dublin.”

In the first half of 2004, the Amex listed 50 new companies, a 61pc increase over the first half of 2003. In addition, consolidated average daily volume of the new listings was 12pc higher and the average market capitalisation of new listings was 70pc higher in the first half of 2004 than in 2003.

The Amex Composite Index (XAX) finished the first half of 2004 at 1249.82, a 29pc increase over the same time last year. The XAX was up 36pc over the past three years and up 57pc over the past five years, outperforming the Nasdaq Composite Index, the New York Stock Exchange Composite Index, the Russell 2000 Index, the Standard & Poor’s 500 Index and the Wilshire 5000 Index during the same periods.

By John Kennedy