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The benefits and risks for US companies of listing on the London AIM market

Levels of corporate activity on global capital markets appear to have recovered significantly during 2010, but with wide regional variations, according to a report from leading global accounting and consulting network Nexia International.

The Global mid-map markets outlook 2011 report examines IPO levels and other key indicators for mid-market stock exchanges around the world and shows a genuinely global upturn in corporate activity still lacking momentum.

Mid-Cap Markets Report

The report highlights Poland, Canada and Australia as some of the mid-market IPO success stories of 2010.

Warsaw now rivals Moscow as the place to go public for mid-market companies from Central Europe and the former Soviet Union, with the city’s stock exchange ranked first in Europe by number of IPOs. Poland’s well-developed financial services infrastructure, together with IPOs of privatised former state companies, have helped establish a wide and active group of private investors in the country.

Australia escaped recession in 2008 or 2009, and its economy grew steadily in 2010, aided by a resource boom that has earned it a place in the world as one of the largest global suppliers of raw materials. To emphasize this point, the best-performing IPO was Doray Minerals, which saw its shares rise 630%. The country also benefits from a diverse investor group (40% foreign, 40% domestic institutions and 20% retail investors).

Signs of life, but report shows that sustained recovery requires catalyst of key deals, led by institutional investors.

Report: Where next for global mid-cap markets?

Levels of corporate activity on global capital markets are showing signs of recovery but new listings or IPOs have not yet begun to accelerate significantly, according to a report from leading global accounting and consulting network Nexia International.

The report “Where next for global mid-cap markets?” examines current sentiment and key issues facing a range of mid-market stock exchanges round the world. Nexia’s market commentators broadly agree that any recovery will largely be led by institutional investors, with international funds flowing to relatively low geared investments. However, a more sustained upturn may require the catalyst of a number of key deals to provide the necessary momentum.

The number of Initial Public Offerings (IPOs) globally remained severely depressed during 2009, with notable regional exceptions – namely Hong Kong, NASDAQ, Euronext and TSX Toronto. Most of the markets showed stronger results for secondary offerings, with 80% of the funds raised across the stock exchanges due to secondary offerings.

Nexia International survey reveals little appetite for early adoption

The introduction of a specific set of international financial reporting standards for SMEs – so-called IFRS-lite – has made IFRS potentially accessible to a wide range of companies around the world. But few SMEs have plans in place to adopt even this lighter version of IFRS before it becomes a mandatory requirement, according to a survey of European member firms by Nexia International, the global network of international accounting firms.

Speaking at Nexia International’s recent annual conference in Prague (its largest to date, with 220 delegates from 67 countries) Stephen Cooper of the International Accounting Standards Board said “IFRS for SMEs was created in response to strong international demand from both developed and emerging economies for a rigorous and common set of accounting standards for smaller and medium-sized businesses that is much simpler than full IFRS. In a recent survey, almost 60% of accounting standard-setters said they planned to require or permit the use of IFRS for SMEs within their jurisdiction in the next three years.”

Nexia International welcomed the IASB’s continued drive towards global standards and acknowledged the IASB’s efforts to drive these developments forward against a back-drop of action required on urgent issues arising as a consequence of the financial crisis.