The International Organization of Securities Commissions (IOSCO) today published a research note on Market-Based Long-Term Financing Solutions for SMEs and Infrastructure. The note is a compilation of recent examples of capital market solutions in developed and emerging markets that have contributed to the financing of small and medium enterprises (SME) and infrastructure projects.
The research note was prepared for the G20 Finance Ministers and Central Bank Governors. It describes innovative structures and products in equity capital markets, debt capital markets, securitization and pooled investment vehicles that provide practical solutions to broadly recognized challenges for financing of SMEs and infrastructure projects.
There is a concern that small and medium sized enterprises are not getting access to the funding they need via stock exchange listings. Peter Clifford, deputy secretary general of the World Federation of Exchanges, the trade association for all the world's regulated exchanges, discusses whether this is the case and what exchanges are doing to encourage SMEs to come to the market.
Eric Forest, Chairman and Chief Executive of EnterNext (NYSE Euronext Group) talks to Focus Magazine on SMEs and how the recently created EnterNext is going to advocate on their behalf.
Chinese economy is undergoing structural changes as it slows down to streamline resource allocation. Misallocation of capital resources is blamed for the recent woes like cash crunch, credit difficulties and wild market fluctuations. Chinese capital markets are now called upon to activate idle funds and provide liquidity to support sound real-economy projects. Instead of sophisticated financial instruments, basic asset-backed securities seem to work just fine to channel funds to viable business projects.
Xavier Rolet, Chief Executive of London Stock Exchange Group (LSEG) talks to Focus Magazine on SMEs and steps the Group is taking to advocate on their behalf. LSEG has been operating AIM, the world’s largest market for small and medium sized investors for over 15 years and has helped thousands of companies raise financing.
The importance of small and medium enterprises (SMEs) to economic growth is widely acknowledged. SMEs are vital to job creation, and contribute significantly to GDP. A fundamental concern for both SME business owners and policy makers is access to growth capital. Growth capital can take many forms, from the notorious “Three F’s” (friends, families and fools), to venture capitalists, over-the-counter equity markets and banks. Another option for SMEs, and one that is gaining increasing international attention, is the SME focused stock exchange.
The need for well‐organized and innovative exchange solutions for small and medium sized companies (SMEs) in Europe and the western world is becoming more apparent than ever. The ongoing global financial crisis has triggered an acute lack of funding that has severe effects on the SME sector. This money draining is induced by banks holding out on traditional loans and is coinciding with the investor community trying to reduce risks by moving towards interest-bearing financial instruments, such as large cap corporate bonds.
The booming IPO market reflects the strong and continuous development of SMEs in China’s private sector in the last three decades. According to the Ministry of Commerce, there are over 10 million registered SMEs, accounting for 99% of all businesses in China. And 99% of the country’s SMEs are private businesses. Furthermore, Chinese SMEs are responsible for 60% of the nation’s GDP, 70% of exports, 80% of urban employment and 70% of patents for technological invention. Undoubtedly, SMEs are cornerstones for the nation’s economic growth and social well-being.
Capital markets facilitate fund raising opportunities for businesses which aspire to invest for sustainable growth in a highly competitive environment. Public offerings play a pivotal role in ensuring that businesses gain international competitive advantage as well as global recognition.
For WFE, the year 2010 is a memorable year: it is the 50th anniversary year of the Federation. For Shanghai (SSE) and Shenzhen Stock Exchange (SZSE), two exchanges in China, the year 2010 is also a memorable year. Two months from now, it will be the 20th anniversary of the founding of the Shanghai and Shenzhen Stock Exchanges.
An initial public offering can change a company. Many in the media seemed certain that if we went public, the Google ethos wouldn’t survive. People predicted that we would suddenly be divided into haves and have-nots on the basis of how many shares of Google stock each of us held. The talent would cash out and quit. A new focus on pleasing Wall Street would cause us to lose our prized objectivity and independence.
For years thousands of companies around the world have been operating outside analyst radar. As of January 31, 2009 there were over 46,000 companies listed on WFE member exchanges worldwide. Add to that the thousands of companies that trade on non-member exchanges and regulated OTC markets, and you have an extremely large population of publicly traded companies all vying for analyst attention.