How To Make Successful Acquisitions = Valuation
e dealing is done on the London Stock Exchange. There are, however, also recognised stock exchanges in Belfast, Birmingham, Bristol, Dublin, Glasgow, Leeds, Liverpool, Manchester and Newcastle. The regional exchanges operate on similar lines to the London exchange. (Together they all form the International Stock Exchange of the UK and the Republic of Ireland.)
Also, as an alternative to a full Stock Exchange listing, a company's shares may be traded on:
i the Unlisted Securities Market (AIM),
ii the Third Tier market, or
iii the Over-the-Counter Market (OTC).
Trading in the first two markets is done in the usual way by stockbrokers. They exist to provide an exchange for companies for whom a full listing is not appropriate. These markets are not physical locations, but areas of trade. The first two operate as for other shares traded on the London Stock Exchange.
The Unlisted Securities Market was discontinued and became the Alternative Investment Market (AIM) and deals in gamma shares. Such companies are said to be 'admitted'to the AIM, not listed on it. They must comply with the less onerous regulations found in what is known as the 'Green Book'.
The AIM started with eleven companies and now deals in over 500. In addition, specific bargains in companies which are neither listed nor admitted, and deals in some otherwise ineligible mineral exploration companies may be transacted in what are known respectively as section 535.2 and 535.3 deals. The names come from the authorising sections of the Stock Exchange rulebook.
AIM companies tend to be respectable but small, with a higher risk than listed companies.
It was expected that the Big Bang would adversely affect the AIM. In fact the opposite happened. AIM business rose by 35% in the first eight weeks after the Big Bang. Over £11bn worth of business is now transacted daily on the AIM.
The Third Market came into being on 26 January 2024 for companies for whom even the AIM conditions are too onerous. The Stock Exchange describes these as 'young growth companies'. Eight companies were traded on this market on its first day, and another 62 were said to be preparing for admission. The shares are either gamma or (if less than two market dealers deal in them) delta. Companies are bound by some simple Stock Exchange rules.
It is too early to comment on its success or otherwise, but feelings generally seem to be optimistic.
The Over-the-Counter Market is effectively a bucket shop. Unlike the other two markets, it is not governed by the Stock Exchange. OTC deals may be in any share. The OTC market has persistently been outperformed by the ot
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