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Growth firms are good for a quote.

SCOTS entrepreneurs are being urged to float their companies on the Stock Market instead of selling them.

Experts warn that our pool of quoted companies - already at a record low - is expected to fall further.

Scotland has turned its back on the quoted market, says leading Scottish company analyst Thorold Mackie, of Edinburgh stockbrokers Sutherlands.

Just 68 of the 75,000 limited companies based in Scotland are quoted on the main stock market, with its benefits of being able to raise capital for rapid growth and acquisition.

"That is about as low as we have ever been. By the end of this year we will have lost 15-16 companies through takeover, delisting and other causes," he adds.

"By the end of next year another seven to eight are dead certs to go too. It's serious."

It's not that people are unwilling to invest. Last week, thousands crammed seminars staged to boost interest north of the border in the Stock Market.

"We need to spark more interest amongst young Scots entrepreneurs who might one day bring their companies to market," Mackie says.

"What's happening now is that the successful entrepreneurs start thinking about a flotation. They talk to advisers and brokers, and there is media froth.

"The next thing - bang, there is a trade sale of the business. It's gone."

It's been almost two years since the last Scottish company floated on the stock market, and four years since the last big business went public - Edinburgh- based Morrison Construction. Yet companies headquartered in England continue to seek stock market funding for rapid growth, particularly in the technology and Internet sector.

The paradox is that Scots seem eager to invest in quoted companies.

The London Stock Exchange's Share Aware campaign last week had packed seminars about making money through long-term investment - still the best way by far to grow wealth.

Yet their cash will mostly go to support businesses based elsewhere in the UK because of the dearth of local companies. The majority of investment ends up in the shares of the FTSE-100 group of Britain's 100 largest quoted firms, which account for two-thirds of the entire quoted company sector.

Only six of them are headquartered north of the border: ScottishPower, British Energy, Scottish & Southern Energy, Royal Bank of Scotland, Bank of Scotland and Scottish & Newcastle

But Stephen Robertson, the stock exchange's man in Scotland, says there are still lots of opportunities for ambitious companies to do well in the demanding quoted company market.

"To succeed they have to be 100 per cent committed to growing their businesses rapidly, like Stagecoach and Robert Wiseman," he says.

"That is not a quick decision. And we are not going to ram flotation down the throats of companies."

And despite the popularity of the Share Aware seminars, research shows that just 12 per cent of Scots own or are interested in owning shares in quoted companies, half the level of interest elsewhere in the UK.

So analysts know they face an uphill struggle to get the stock market message over while so few local companies go public.
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Author:Balfour, Alastair
Publication:Sunday Mail (Glasgow, Scotland)
Date:Oct 10, 1999
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