A BIRMINGHAM online stock exchange could become the model for a chain of similar organisations across the country as the Government looks to improve ways of funding regional businesses.
In a Green Paper entitled Financing a Private Sector Recovery, Business Secretary Vince Cable has outlined ways the coalition is exploring to ensure SMEs across the UK get the financing they need in order to sustain the economic recovery.
Various proposals have been put forward, of which the stock exchange idea is just one.
Investbx, the Birmingham online stock exchange has been operational since 2006, has brought three regional companies to the market in that time.
More had been expected but the recession curbed the appetite for investment.
Many favour the approach because it would improve the accountability of firms if they had more locally-based investors.
Sue Summers, chief executive of Investbx said: “The regional exchange model being proposed by the Business Secretary is one that has been in operation here in the West Midlands and we are delighted this issue is on the agenda.
“Investbx is the inaugural regional exchange of the 21st century and, as a result, people have been watching with interest to see how the idea has developed, even against the backdrop of the global downturn in investment markets which is the environment in which we have had to become established.”
She said it was clear that innovative ways of securing investment would be necessary to help regional companies to grow and regional exchanges were just one of the ways this could be achieved.
“Bringing together the investor community in support of such a concept is vital and here in the West Midlands we have taken huge steps towards achieving this.
“We strongly agree that it’s vital that lifeblood businesses of the regional economy get the help they need while at the same time we reduce the UK economy’s dependence on the City of London,” she added.
The Green Paper said it was seeking views on the stock exchange principle but would not be committing to anything.
“Some commentators have proposed regional stock exchanges to help regionally focused sources of business finance,” said the document.
“Such an approach might, however, fragment liquidity and narrow the pool of investors available to each SME. The Government is interested in views on regional stock exchanges and how these could be made to work successfully, overcoming liquidity issues.
“It would also be interested in views on alternative ways of increasing local sources of finance through, for example, Business Angel finance or targeted promotion of local companies listed on national stock exchanges.”
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