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by blippage
563 days ago
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I just skimmed the docs, but I heard about it a few days ago. Noteworthy points:
* it's not a way for companies to raise capital
* not much in the way of regulation. Main UK listings are quite rigorous. The UK has an AIM market, in which a company is sponsored by a broker. It's a "junior" market. It's very wild-west, and the long-term performance has been bad. That's mostly because the constituents are some of the biggest piles of garbage imaginable. There are some high-quality ones, though
* Trading is infrequent, like once a quarter or something.
* It's mainly designed for professional investors and and "eligible" investors (you'll probably need liquid assets of at least £1m to qualify)
* I think it's intended for small companies to get used to public scrutiny, with a view that they will get a proper listing I think the Tory gov't had mooted such a scheme, but nothing materialised. Labour has implemented it. I'm a critic of Labour supporter, but I suppose I should at least give them some kudos for trying. My more impartial evaluation is that I don't think it will provide much value. Interestingly, there used to exist another public exchange for UK shares outside LSE (London Stock Exchange) - maybe its PLUS or OFEX that I'm thinking about - but they closed down now. It was pretty cruddy from what little I saw, with gigantic spreads. The tiddly exchanges don't really make much sense IMV. Why would I want to invest in companies that are likely to be pretty junky, are unlikely to treat their external shareholders fairly, have dubious corporate governance, and enormous spreads? I could buy into much higher-quality companies on LSE. Just my 2c.
* It's a five-year trial, whereupon the results will be evaluated. |
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