13/05/2011 by Robert Tyerman, Growth Company Investor
Bridge Hall Securities, Curzon Corporate Finance and IAF are among the investment groups understood to be joining the new GXG share-trading facility, which is due to open for business later this month.
GXG Markets UK, owned by the Swedish GXG Global Exchange Group, is launching this new online platform, which is subject to Danish regulation, in alliance with AIM-quoted financial services minnow Merchant House Group and hopes to attract a matched-bargain service for smaller companies chafing at the costs and illiquid trading conditions many experience on AIM or PLUS.
Using software called ‘Tellus’ designed by its team in Sweden, GXG Markets UK, run by managing director Simon Kiero-Watson, will also offer an ‘over the counter’ facility for professional investors to trade companies that may not have Plc status. For the Danish-regulated market, GXG and Merchant House envisage listing companies valued at between e5 million and e50 million (£4 million and £42 million).
GXG Group, headed by chief executive Mikael Rosenberg, is using Danish regulations because it already operates an equivalent facility in Denmark and under European Union rules it can use its Danish approvals and licences to trade in Britain. The company says ‘passporting’ in this way is significantly faster and cheaper than starting from scratch.
Kiero-Watson argues that GXG’s matched-bargain system will eliminate the hefty spreads between bid and offer prices often suffered on PLUS and sometimes on AIM, and contends that GXG’s costs will compare favourably with existing exchanges and markets. Rosenberg wants GXG, which has links with some major continental financial groups, to create a pan-European marketplace for small and medium-sized companies and alternative investments.
PLUS Markets Group, AIM-quoted operator of the PLUS share market, denies feeling threatened by GXG. Paul Haddock, head of capital markets at PLUS, says ‘competition can often be beneficial’ and argues that a ‘key difference is that PLUS has Recognised Investment Exchange status’.