Companies pay less for an IPO or capital increase at Deutsche Börse than they do on any other European stock exchange. This is the conclusion reached by a study presented by Professors Christoph Kaserer and Dirk Schiereck at the German Equity Forum on Monday. The comparative study shows that investors benefit from the low transaction costs resulting from the high level of liquidity offered by Deutsche Börse. “The low capital costs and high liquidity make Frankfurt an attractive listing venue for both German and international companies”, said Rainer Riess, who is responsible for Deutsche Börse’s cash market.
At 8.7 percent, the total cost of an IPO in Frankfurt is considerably lower than in London, where IPO costs are 11.7 percent. This cost advantage means that stock exchange newcomers face substantially lower capital costs when they opt for a listing in Frankfurt. The results of the study also confirm the high level of trading activity in Frankfurt: at €31 million, the average daily trading volume of each Prime Standard company is considerably higher than on London’s Main Market, where the average volume stands at €6.3 million. The volume on the Entry Standard is almost twice as high as on AIM.
The Entry Standard, which Deutsche Börse launched in October 2005, has since now firmly established itself as an alternative access to the capital market for small and medium-sized companies. The Entry Standard serves as an entry segment, because it offers companies fast and cost-efficient access with low legal requirements. The segment now lists 71 German and foreign companies, making it the largest alternative market in continental Europe. Three companies have already been promoted to the General and Prime Standard segments, meaning that they used the Entry Standard as a stepping stone to further development on the capital market.
Deutsche Börse has now issued an IPO manual, which was also presented in Frankfurt on Monday, to help companies that want to go public. The manual offers a comprehensive and up-to-date source of information on all practical matters relating to the IPO process for the first time. The manual contains specialist contributions from leading German capital market experts dealing with issues such as measures to prepare internal company infrastructure, how to select the right market segment and how to structure financial communications once the IPO is completed.
The German Equity Forum is organized by Deutsche Börse in cooperation with KfW Mittelstandsbank, and has established itself as the largest capital market event in Europe. More than 200 listed and 50 non-listed companies will hold presentations at the three-day event. Deutsche Börse and KfW Mittelstandsbank have been organizing the German Equity Forum twice annually since 1996.
