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In focus: Are Northern exchanges set to return?

SPECULATION is mounting that regional stock exchanges will be opened as part of government plans to help companies outside London. Jon Corbett asked one of the region’s top financial experts what the potential move would mean for the North East.

In a recent interview, Business Secretary Vince Cable said he believed that a wave of new regional stock markets would help firms with a turnover of around £10m attract new investors.

As Mr. Cable considers new proposals, Paul Williamson, senior Partner at Newcastle accountancy firm Deloitte, yesterday told bdaily how a northern stock exchange could impact on the North East economy.

He said: “A Northern stock exchange may well facilitate local companies in this region raising equity. The real danger however is that regional stock exchanges may not employ the same degree of regulation that the London Stock Exchange does.

“It may be too high risk and may not reach the objective it set out to achieve. If investors can’t take confidence in a regional stock exchange like they can in the LSE then the market won’t succeed.

“There are problems attached to a regional stock exchange but as long as they’re addressed then there is a purpose to be served for the North East.”

Leeds is said to be the “natural location” for a revived northern stock exchange according to Tom Riordan, chief executive of Leeds City Council.

The former head of the regional development agency Yorkshire Forward said the public and private sectors were considering the viability of a scheme, which could see a stock exchange return to Yorkshire after a 37-year absence.

However, in the early 1960s, Newcastle boasted no less than 11 stockbroking firms on its own bourse and Mr. Williamson said the North East would still have a strong case for setting up its own regional exchange.

He added: “Of course the proportion of plcs based in Yorkshire and Humberside is considerably greater than that of the North East and, on a rational basis, I can understand why a Leeds Councillor may see Leeds as a good choice, but the North East certainly has potential.

“If a North East regional stock exchange is properly monitored and regulated and it understands the local market this may better suit a local based company in the area that wants to raise equity.

“It may understand the North East investor profile better than the London Stock Exchange and match the needs of the company more effectively.”

Stocks and shares have been traded in the UK for more than 300 years. The LSE is one of the world’s oldest and can trace its history back to the coffee houses of 17th-Century London.

The first regional exchanges opened in Manchester and Liverpool in 1836. Newcastle had its own stock exchange for many years, starting life in Neville Hall on Westgate Road.

This was posted in Bdaily's Members' News section by Ruth Mitchell .