New York, NY – The London Stock Exchange announced today that it had established a new research venture called PSQ Analytics to provide research coverage on public companies listed on the AIM or smaller companies on the Main Market. Through the new PSQ Analytics venture, the LSE hopes to offer smaller companies with the ability to purchase high quality research coverage — a development they believe will help drive increased liquidity to previously under covered companies.
The LSE’s three partners in developing this new initiative include New York-based Argus Research, London-based Independent International Investment Research Plc (IIIR), and Chicago-based Pipal Research. These three firms were chosen by the LSE to initiate research coverage on smaller companies that choose to opt into the new scheme.
PSQ Analytics will select the appropriate research provider for each company that chooses to obtain coverage. The research will be distributed to potential investors for no charge over Bloomberg, Thomson Reuters, and the LSE’s own website. Annual research coverage is expected to cost approximately 10,000 GBP per annum. The LSE estimates that the target audience for this service is approximately 1,000 smaller companies.
The LSE’s new initiative is somewhat reminiscient of a joint venture established in 2005 by NASDAQ and Reuters called the Independent Research Network (IRN). The venture was shuttered after a few years after getting limited traction with U.S. companies who were unwilling to pay the hefty prices the IRN was looking to charge for research coverage.
The London Stock Exchange Press Release posted below provides more dteials about the new PSQ Analytics initiative.
LONDON STOCK EXCHANGE TO ESTABLISH EQUITY RESEARCH SERVICE FOR SMALLER COMPANIES
Exchange to consult on additional measures to promote liquidity
The London Stock Exchange today announces the establishment of a new service to offer equity research on smaller quoted companies. PSQ Analytics, as the venture will be called, will be available to companies on AIM as well as smaller companies on the Main Market, and will provide information that improves investor understanding of their businesses.
The new service coincides with the start of a consultation on other measures aimed at boosting liquidity in the shares of smaller companies. The Exchange will be consulting member firms on measures it could take to improve price formation and liquidity provision for smaller companies. Under consideration are changes to market making obligations, the costs associated with market maker registration as well as the reduction and possible removal of reporting fees in less liquid equity securities on the Main Market and AIM.
The research service is being established by the Exchange for the benefit of the market. Three research providers – Argus Research based in New York, Independent International Investment Research Plc based in the UK, and Pipal Research based in Chicago – will work together to produce standardised, high quality, cost effective equity research in accordance with an agreed template. The three providers all have a strong track record of providing objective research across a wide variety of sectors.
The research will reach the widest possible audience of investors, free of charge, with distribution provided initially via Bloomberg, Thomson Reuters and a dedicated web portal.
Martin Graham, Head of AIM and Director of Equity Markets, said:
“Over recent years, AIM has become established as the world’s premier growth market. Across AIM and the Main Market, the Exchange supports a huge diversity of smaller companies that are competing to attract investor interest. Equity research is a key tool to allow them to get their message heard.
“The market feedback we have received demonstrates that there is huge value for companies in this scheme. By paying for research to complement the services already provided by brokers and other research firms, companies can increase visibility and understanding of their stock, leading to a wider investor base and ultimately enhanced liquidity.
“This is why we are delighted to be launching this initiative with 3 highly regarded research suppliers – Argus, IIR and Pipal. We are also pleased to be supported by the two largest data vendors in the world, Bloomberg and Thomson Reuters, who will distribute this data.”
Further details of the scheme include:
Equity research provided through PSQ Analytics is expected to cost a company in the region of £10k per annum, opening up research to companies for whom current market offerings are often not economic.
Companies will be allocated one of the three providers on a pre-determined allocation basis to ensure the impartiality of the research.
The research will consist of comprehensive factual information and analysis. It will not be investment advice and will not make recommendations.
The research providers have agreed to share common methodologies and produce reports that follow a uniform presentation format, in order to facilitate cross-company and cross sector comparisons by investors.
The full PSQ Analytics service is scheduled to launch fully in the autumn.
The service will be entirely optional for smaller quoted companies on both AIM and the Main Market although we expect take up of the service to be good. The target audience covers more than 1,000 companies.
The Exchange is setting up the scheme for the benefit of the market and will not be taking any revenue from this service. The Exchange’s role will be to provide marketing support and facilitate the widest distribution of the research.
For further information, please contact:
Patrick Humphris Press Office +44 (0)20 7797 1222
Notes to editors:
About the London Stock Exchange Group:
London Stock Exchange Group is Europe’s leading diversified exchange business. It operates Europe’s largest and most liquid equity market, holds the number one position in trading ETFs and securitised derivatives, and through its interest in MTS, is the leading platform for the trading of fixed income products.
The London Stock Exchange itself is the world’s most international exchange with over 700 overseas companies from over 70 countries on its markets. It has consolidated this position in the last two years, having attracted 202 international companies which raised nearly £30 bn between them. These figures include international companies on AIM, the London Stock Exchange’s growth market, which has grown to become the world’s most successful market for small and medium sized enterprises with close to 1700 companies at the end of 2007.
Following its merger with Borsa Italiana in 2007, London Stock Exchange Group also now offers posttrade services such as netting, clearing and settlement on an efficient and competitive basis, and a comprehensive range of European bond trading services through MTS.
About Argus Research Company:
Founded in 1934, Argus is a leader in independent equity research, offering in-depth economic analysis as well as forecasts and ratings on more than 700 U.S. and international firms. Argus employs a rigorous six-step process to analyze companies, and provides clients with regular updates through consultation and conference calls, online publications, and more than 4000 individual research reports a year.
About Independent International Investment Research Plc:
IIR is the UK’s leading source for impartial research and strategy for global equities and foreign exchange and was admitted to AIM in 2000. The Group has become a leading specialist in the USA for the provision of research on non-US companies. Core product offerings are: GEO Monitor™, providing research on Initial Public Offerings from around the world; Research Oracle™ (www.researchoracle.com ), which provides access to the Group’s international research free of charge; and Global Research, which provides access to financial models, sector analysts, short-term trading strategies, and corporate access services. IIR is a member of the British Olympic Association Council, promoting and assisting Team GB athletes in Beijing 2008 & London 2012.
About Pipal Research Corporation:
Pipal Research Corporation, a subsidiary of Firstsource Solutions, is a leading independent investment research, corporate intelligence and analytics company. Pipal’s financial services offering serves a broad spectrum of clients from buy side to sell side to investment banks and commercial banks, providing a range of services, including equity/ sector/ country research, fixed income research, financial modeling and valuation, forensic accounting, portfolio performance assessment and reporting, investment due diligence, pitch books and other custom research. Pipal’s global delivery model enables it to deliver timely, high quality, objective and cost effective research. Pipal is headquartered in Chicago, USA and has operations in UK, India and Ireland.