Baker Street, London -- It was telecoms and technology yet again today. But you probably could have guessed that already. British Telecommunications(LSE: BT.A) was responsible for a big share of the gains, adding 34 points to the FTSE 100 index.
365 Corporation is the latest internet flotation to hit the UK. This morning they announced more details regarding the offer. The price range will be 135p to 150p with the mid-point valuing the company at £260m. With an alleged 790,000 unique visitors in September, each is valued at around £330.
Microsoft(NASDAQ: MSFT) took a moment off from their anti-trust battles to announce a strategic alliance with Tandy's (NYSE: TAN) RadioShack. This would establish a Microsoft 'store within a store' allowing internet access in up to 7,000 sites across the US. As part of the deal Microsoft will invest $100m.
Results from BT along with continued merger speculation drove the telecom sector upwards. TMFEagle had a look at the former monopoly in today's Lunchbox. Their shares climbed an impressive 107p or 9.3% to 1254p. Telewest (LSE: TWT) was the other sector member to report today. Its losses increased as it continued to invest in its digital operations. That didn't seem to bother investors who saw their shares rise 20.75p, or 7.3%, to 305p.
Even the forgotten child of the sector, Cable & Wireless(LSE: CW.), wasn't left out of the action. Yesterday's results are still being chewed over but the shares still added 115p, or 17.3%, to 780.5p. That's an increase in market value of £2.8b. Also riding the telecoms wave is GEC(LSE: GEC) which zoomed up 77p, or 10.4%, to 819.5p, adding a whopping £1.8b to the group's market value.
Thus(LSE: THUS), floated off from Scottish Power(LSE: SPW), enjoyed its second day of trading on the 'grey market'. The shares climbed 32.5p, or 9.7%, to 367.5p valuing the group at £2.6b. Unconditional dealings in the shares start on November 17.
Imagination Technologies(LSE: IMG) continues to scale new heights. The designer of 3D graphics chips chipped in with a multidimensional upwards move of 45p or 21.8% to 251.5p. TMFEssex had the stock for breakfast on Tuesday. It is yet another company to benefit from the growing appreciation of the licensing business model.
Admiral(LSE: ADC) which saw its stock plunge earlier this year seems to have reversed most of the damage recently. Today the shares sped up another 232.5p, or 21.3%, to 1325p and its chairman, the extravagantly named Clay Brendish, gave an update on current trading and prospects.
QXL(LSE: QXL) is another stock that has had a very happy November. Today it rose a further 92.5p, or 25.2%, to 460p. The internet auction house is now valued at £575m, which is still some way short of the £750m price tag that was suggested earlier this year.
Is Medeva (LSE: MDV) finally going to get hitched? Celltech Chiroscience(LSE: CCH) has announced that they are taking over Medeva in a 165p/£563m deal. The combined group will be valued at approximately £1.3b. That's not really going to close the gap with the big boys of the pharma sector, as discussed in yesterday's Sector Dissector. Medeva's shares rose 3p, or 2.0%, to 156.5p.
Somerfield(LSE: SOF) updated its investors on its current trading and laid out its detailed plans for trimming down its portfolio of stores. We had a closer look in the Breakfast Fool this morning. But the market wasn't very impressed and knocked another 10p, or 10.6%, off the shares which now trade at 84p.
Electronics Boutique(LSE: EBQ), the computer games retailer, was another stock to fell the chill wind sweeping through the industry. The broker Teather & Greenwood (LSE: TEG) highlighted the short term uncertainty and price competition in the sub-sector, although it remains bullish over the long term. But the market latched onto the 'uncertainty' aspect as the shares dropped 9p, or 10.0%, to 81p.
British Energy(LSE: BGY) fell 20p, or 5.0%, to 380.5p as investors reflected on yesterday's interim results and the fact that the company may drop out of the FTSE 100 index. The company is trying to broaden its results beyond nuclear power generation.
Chippenham, Wiltshire -- At the start of November the London Stock Exchange launched its new market, techMARK -- named after technology MARKET. At first sight this seems to have been an exciting move -- the Grand Old Stock Exchange was beginning to catch up with the times and was setting out to promote technology and rapidly growing companies. The most important role of techMARK has to be to encourage more new companies to float on the London market.
The London Stock Exchange describes techMARK as "a market within a market - grouping together companies from a wide range of FTSE industrial sectors into a market with its own identity and its own FTSE index." They describe it as a stock market, but what is the difference between techMARK and an index? Why all the fuss?
The London Stock Exchange claims that techMARK will offer companies a higher profile and visibility, which will lead to greater investor interest, greater media coverage and interest, which will lead inevitably to increased liquidity. For all stock markets liquidity is king. The availability of new cash to fund investments, and the availability of a liquid market to trade stocks, is vital. The new techMARK will make it easier for investors to identify technology companies, and will enable them to monitor the performance of the technology sector through the FTSE techMARK index. The aim is to create higher turnover and liquidity in technology stocks and a focus for attracting high quality companies to the market.
OK, this is sounding even more and more like an index. It's not a stockmarket really is it? Where is the beef, as our cousins from the other side of the Atlantic like to say? Well, the only beef is that the LSE are relaxing the rules a little. In the past, some companies have been refused a public listing because they did not have the three-year track record generally required of a company seeking a listing on the main market. In techMARK this rule has now been relaxed allowing new "innovative, growth companies" without a three-year trading history to seek a listing on the main market and join techMARK.
There are however some restrictions. They must have a minimum market capitalisation of £50 million, and be selling a minimum volume of new or existing shares on flotation of £20 million, and they must also undertake to provide quarterly financial reports. Wow that really is revolutionary - NOT. Don't expect that because your favourite company is now in the techMARK index that they will now start producing quarterly reports. This rule will only apply to new entrants to the market.
At the moment techMARK consists of 181 listed companies. Their progress is monitored by two indices, the techMARK All-Share and the techMARK 100. The All-Share is calculated each evening while the 100 index is calculated continuously throughout the day.
Surely what was needed was much more than this? There is likely to be a whole raft of new companies coming to the market in the near future, and many of them will be Internet start up operations with a good idea but little or no track record. Clearly the LSE had to do something to prevent these companies from sneaking off and listing on other markets, but will techMARK really achieve this?
What is it that these high tech companies really want from a stock market? They want to be able to raise capital quickly, easily and -- most importantly -- cheaply. The role of a stockmarket is to provide finance for companies to grow, and to provide a market in which shareholders can trade their shares. Basically what investors need is transparency. The stock market should be ensuring that all investors have access to flotations, and that they have the best possible information as quickly as possible. The new market seems to be simply a fancy name for an index, rather than a stockmarket proper. Nothing has really changed for investors with this.
Rather than tinkering, the LSE really needs to take a good hard look at what investors and companies really want. Companies want access to capital at a low cost, investors want to buy shares without having to pay brokers and market markers extortionate fees. Investors also want to buy companies in Germany, Spain and Italy as easily as they can buy shares in companies in the UK. They also want to be able to buy shares in the USA.
We want to see one market, one trading system through out Europe (at least throughout the European Union) but of course entrenched interests in the markets in each of the different countries will make this almost impossible to achieve. The existing European stockmarkets are at risk. They are not pressing ahead with a single European Stock Market, and they must recognise that if they don't act soon they risk missing the boat completely. Someone else will come along and do it, indeed NASDAQ is coming and will offer a very attractive alternative.
In the USA, NASDAQ has proven itself to be able to finance tiny companies and start-ups and see them grow into technology giants. It has had huge success in raising capital for these businesses and certainly must take a share of the credit for the creation the huge US bull run of the last ten years. Technology has lead they way in the US and NASDAQ has facilitated this.
In Europe NASDAQ is setting itself up as a pan-European stock exchange. The existing European exchanges may find themselves bypassed unless they get their act together to form a cross-European alliances, and quickly. NASDAQ-Europe will create a European market for initial public offerings (IPO's), listing high-growth companies from all across Europe. It is being modelled on the US NASDAQ Stock Market, and will offer European investors an Internet-accessible, high-performance, low-cost trading platform, which will also be linked with NASDAQ markets in the US and Asia.
It is clear to me that conventional stock exchanges based on geography are dead. Modern communication technology has robbed them of their very reason for existence. Two hundred years ago it was important to have a physical place where you could go to trade shares, but today what does it matter where a stock market is actually based?
What will matter is that they must provide cheap, efficient dealing platforms and liquidity. As I said, liquidity is king, and NASDAQ is setting its stall out to try to capture the world-wide liquidity for the hi-tech sectors. TechMARK is no substitute, and the London Stock Exchange must think again.
Doctors have been speculating on possible medical advances that we may see in the next century. They include sensor implants and electronic noses that will sniff out growing bacteria. The prize for the most disgusting has to go to the toilet that will analyse your urine and automatically send a sample to your doctor. What other health advances do you think we see in the next 100 years. Let us know on the Daily Fool message board.
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