TechFinancials applies to list on NEX. What for?

Maria Nikolova

The company sees its plan to dual list its shares on the NEX as being entirely complimentary to its AIM listing.

In a financial world where cross-listings bring a handful benefits and loads of extra costs, TechFinancials Inc (LON:TECH) which until recently grappled with the issue of how to dispose of its Cypriot binary options business, has decided to stick to trivial wisdom and apply for admission to the NEX Exchange Growth Market.

The relevant announcement was released earlier today. The company says it has applied for admission of its entire issued share capital of 84,980,979 fully paid ordinary shares of USD0.0005 to trading on the NEX Exchange Growth Market (“NEX”), with the admission set to to take place on or around August 8, 2018.

TechFinancials sees its plan to dual list its shares on the NEX as being entirely complimentary to its AIM listing, and the company plans to remain trading on AIM following its admission to NEX.

Next up comes the most important part: the explanation of the rationale for such a dual listing. Unfortunately, all TradeFinancials does is appeal to outdated conventional phrases when it comes to dual listing.

“The Directors believe that a dual listing on NEX will increase the visibility of the Company in the market; may potentially enhance liquidity for the Company’s shares; and create a solid platform on which the Directors can continue to promote the Company’s growth”.

However, none of this seems to be compelling.

  • First off, analysts tend to provide coverage (and thus increase visibility) of larger companies, regardless of whether they are dual listed or not. Plus, the difference in coverage is pretty small if a company is cross listed as compared to if it is not.
  • Second – the trading volumes of cross-listed shares typically account for a very small percentage (not more than 5%) of trading volumes of a company’s shares. Hence, the argument about enhanced liquidity is not valid.
  • Furthermore, the promotion may happen in terms of press releases but these will barely help if the company does not demonstrate actual growth and return on invested capital (ROIC).
  • In addition, dual-listed companies face higher costs – exchange fees, for example, and much higher compliance costs.
  • Finally, let’s not forget that investors tend to invest in shares they find attractive – and the dual listing itself can hardly be called a factor in that decision-making process.

Read this next

Retail FX

Italian watchdog red flags Olympus Brokers, UnicoFX and Allfina Group

Italy’s Commissione Nazionale per le Società e la Borsa (CONSOB) has shut down new websites in an ongoing clampdown against firms it accuses of illegally promoting investment products in the country.

Retail FX

XTB revenues hits zł1.45 billion in 2022, Q4 earnings disappoint

Poland-based Forex and CFDs broker, XTB has reported its final results for Q4 of 2022 and the full fiscal year ending on December 31, 2022, showing one of its most successful corporate years.

Executive Moves

Lirunex Limited recruits Waleed Salah as head of MENA sales

Maldives-based brokerage firm Lirunex Limited has secured the services of Waleed Salah, who joined the company in the role of its head of sales for the MENA region.

Executive Moves

Trading 212 parts ways with co-founder Borislav Nedialkov

Trading 212 has a void to fill at its FCA-regulated business in London, following the departure of two key players, Raj Somal and Borislav Nedialkov.

Digital Assets

Binance acquires troubled crypto exchange GOPAX

Binance, the world’s largest digital asset trading platform, has reportedly acquired a majority stake in the troubled South Korea-based cryptocurrency exchange GOPAX.

Digital Assets

Kraken exits Middle East, closes UAE office

Digital currency exchange Kraken will close down its operations in Abu Dhabi, UAE and lay off the majority of its team focused on the Middle East and North Africa.

Industry News

CFTC comments on ION Cleared Derivatives issues after Russian-linked hack

“The ongoing issue is impacting some clearing members’ ability to provide the CFTC with timely and accurate data. As this incident unfolded, it became clear that the submission of data that is required by registrants will be delayed until the trading issues are resolved.”

Industry News

FCA took down 14 times more misleading ads in 2022 thanks to technology

The FCA has made significant improvements to the digital tools it uses to find problem firms and misleading adverts. These improvements have enabled it to work through a much larger number of cases compared with 2021.

Executive Moves

HKEX appoints ex-Goldman Sachs Matthew Cheong to lead platform’s focus on derivatives

“He has worked for a number of the world’s leading investment banks and his experience will be invaluable to HKEX as we continue to enhance our derivatives product offerings and build on our innovative and robust platform business, connecting capital with opportunities.”

<