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Equity Markets – Preparing for the Future

Equity Markets – Preparing for the Future. March 31, 2009 in Nizhny Novgorod. Key Themes. The London Stock Exchange is an established platform for international companies to raise capital; Equity today is undervalued relative to bonds

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Equity Markets – Preparing for the Future

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  1. Equity Markets – Preparing for the Future March 31, 2009 in Nizhny Novgorod

  2. Key Themes • The London Stock Exchange is an established platform for international companies to raise capital; • Equity today is undervalued relative to bonds • Last week saw 1.9 billion USD of flow into Global Emerging Markets funds - At the country and regional level there was a marked preference for commodity producers with Brazil, Russia, Australia and Canada Equity Funds all posting solid inflows. • In the first half of 2008 before the global crisis intensified, AIM led all growth markets in funds raised • Companies from Russia (and other CIS) have done well on AIM in IPO and further capital raised • The time is right to start thinking about your equity valuations

  3. Money Raised - South America 250 200 150 £ milion 100 50 0 2002 2004 2007 Capital raised on our markets

  4. Prospects for Equity in 2009 - What the Federal Reserve Earnings Model tells us Source: QFR, www.quasarfinancialresearch.com

  5. Equity Fund Flows – Looking for Yield “The latest data certainly paints a picture of money leaving essentially passive vehicles such as Money Market Funds and being put to work in funds offering more risk and higher rewards” - EPFR Global Senior Analyst Cameron Brandt. Source: EPFR

  6. IPO Money Raised – Benchmarking AIM Source: IPO Watch Report, Q3 2008

  7. Money Raised by CIS companies on AIM (£m) CIS AIM Money Raised,(£m) The average for CIS AIM companies at admission is £98m and the average further raise is £26m. Source: London Stock Exchange Statistics, March 2009

  8. Conclusions • Investors will return to equity markets • Emerging markets with a strong commodities base will be among the first to receive fresh capital • Russian and CIS companies have established a visible presence in London, not only on the Main Market but on AIM as well • Small and Middle-Cap companies need to include AIM on their menu of finance options in 2009/10

  9. Contacts Jon Edwards Senior Manager, CEE & CIS International Business Development jedwards@londonstockexchange.com +44 20 77971599 Maria Aleksandrova CEE & CIS Team, maleksan@londonstockexchange.com +44 20 77971444

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