Irish Stock Exchange

Irish Stock Exchange
Stocmhalartán na hÉireann
Type Stock exchange
Location Dublin, Ireland
Coordinates53°20′42.2″N 6°15′41.7″W / 53.345056°N 6.261583°W
Founded1793
1799 (statutory)
OwnerIrish Stockbrokers
Key peoplePadraic O'Connor (chairman)
CurrencyEUR
No. of listings49
Market capEUR85.5bn (2012)[1]
IndexesISEQ 20
Websiteise.ie

The Irish Stock Exchange (ISE; Irish: Stocmhalartán na hÉireann) is Ireland's only stock exchange, and has been in existence since 1793. It was first recognised by legislation in 1799 when the Irish Parliament passed the Stock Exchange (Dublin) Act.[2] At different periods in its history, the ISE included a number of regional exchanges, including the Cork and Dublin exchanges. In 1973, the Irish exchange merged with the other British and Irish stock exchanges becoming part of the International Stock Exchange of Great Britain and Ireland (now called the London Stock Exchange). Between 1973 and 1986 there were no new company listings.[3]

In 1995, it became independent again and since then has expanded internationally and established itself as a global listing centre for international fund and debt securities.

Markets

The Irish Stock Exchange operates three markets:

The Main Securities Market (MSM), the principal market for Irish and overseas companies, which admits a wide range of security types such as shares, bonds and funds to listing and trading. The Main Securities Market is a regulated market as defined by Markets in Financial Instruments Directive (MIFID). It is the principal market of the ISE for larger, more established companies – Irish and international – from a broad range of industry sectors including financial services, building, oil and gas, utilities and food.

The Enterprise Securities Market (ESM), an equity market designed for growth companies. The ESM is an exchange regulated market and multi-lateral trading facility (MTF) as defined by MiFID. It is the ISE market for smaller, growth companies and has been specifically designed to meet the funding needs of companies at earlier stages in their development.

The Global Exchange Market (GEM), a specialist debt market for professional investors. GEM is an Exchange regulated market and MTF as defined by MiFID.

The Royal Exchange in 1837

Current operations

The exchange is owned by Irish Stockbrokers and the country currently has two large, and half a dozen medium-sized, brokerages but most observers believe this cannot continue indefinitely, as sales from trading commissions and fees from corporate deals tumble because of the recession.[4]

On 6 June 2000, the ISE closed its trading floor in Anglesea Street (a listed building),[5] Dublin 2, and switched to an electronic trading platform called ISE Xetra which has enabled it to expand its membership base to include international banks and) used by the Deutsche Börse Group. Trading on the ISE is settled via the CREST settlement system which is operated by Euroclear (UK and Ireland) and cleared by Eurex Clearing AG. It operates three markets – the Main Securities Market, the principal market for Irish and overseas companies; the Enterprise Securities Market (ESM), an equity market designed for growth companies; and the Global Exchange Market (GEM), a specialist debt market for professional investors.

The published index of shares is known as the Irish Stock Exchange Quotient or ISEQ Overall Index. Other indexes of the exchange include the ISEQ ESM Index, the ISEQ 20, the ISEQ General, ISEQ SmallCap, and ISEQ Financial. The ISE also has two other ISEQ 20 based indices, the ISEQ 20 Capped Index and the ISEQ 20 Leveraged Strategy Index.

The exchange is regulated by the Central Bank of Ireland under the Markets in Financial Instruments Regulations (MiFID) and is a member of the World Federation of Exchanges and the Federation of European Stock Exchanges.

Just two companies, Ryanair and CRH plc (which has its primary listing in London),[6] account for the bulk of the day-to-day share dealing on the exchange since the collapse of Irish banking stocks. Trading volumes on the exchange in 2011 are about a quarter of the 2007 peak. [7] In June 2012, following the collapse of a stockbrokers, the Irish Independent asked "Will there even be a stand-alone Irish equity market in five years' time? The omens are not good."[8]

The Exchange demutualized in April 2014, with the country's main stockbrokers receiving shares in the €56m-valued exchange and dividing up €26m in excess cash. Davy Stockbrokers took the largest stake, at 37.5 per cent, followed by Goodbody Stockbrokers with 26.2 per cent; Investec with 18 per cent; RBS 6.3 per cent; Cantor Fizgerald 6 per cent; and Campbell O’Connor with 6 per cent.[9]

Criticism

Two reports of an investigation into the "wholly inappropriate sale of perpetual bonds" by Davy Stockbrokers to credit unions failed to involve any of the credit unions affected, leaving them "in the dark and powerless to add any value to the findings of this investigation". The ISE, who have Davy as one of its largest shareholders, then declined to give them access to the reports. The Chairman of one the Credit Union's who suffered large losses told his members '‘The failure to publish the reports is to place the complaints process in a shroud of secrecy. Such a failure of openness, transparency and fairness can only serve to undermine confidence in the complaints process, forcing those with grievances into the courts. Such a course of action is not in the interest of any of the stakeholders."[10]

The number of equity companies quoted is dwindling as companies go broke, de-list or move overseas but their lucrative fund and debt securities listings could prove attractive to other exchanges, although a parliamentary committee in December 2009 was told that they do not intend to merge with a larger rival.[11]

In April 2010, the chief executive of Financial Regulation at the Central Bank of Ireland told the same committee that "senior management of the exchange should step up to the plate" after failing to help charities, credit unions and rich individuals who received letters informing them that many investments made by stockbrokers over the past decade are now worthless.[12][13]

It employs 92 people who are paid an average of €98,000 when pensions and employer contributions are taken into account.[14]

The Central Bank began an unprecedented investigation into the entire stockbroking community in December 2011.[15][16] The 12-month-long investigation found "major problems" and that there would have to be mergers of firms to ensure the industry survives. This merger process will have to be done in a controlled way – because any instability in the sector could pose a danger to many people's savings, and prevent new businesses from raising money at a time when banks are not lending.[17][18]

In September 2012 it was forced to issue a correction after it reported figures to the market that suggested a surge in trading in government bonds, in one case as much as 85pc of the year's volume of trades were reported to have gone through the system is a single day.[19]

List of companies listed on the ISE

References

  1. ↑
  2. ↑
  3. ↑ The best apps of 2012: (30 November 2012). "Tom Healy – Irish, Business". Independent.ie. Retrieved 22 December 2012.
  4. ↑ Alex Ferguson: (2 December 2012). "Nervous times as brokers take stock of a fast changing world – Stocks & Markets, Business". Independent.ie. Retrieved 22 December 2012.
  5. ↑ http://www.dublincity.ie/Planning/HeritageConservation/Conservation/ProtectedStructures/Documents/Record%20of%20Protected%20Structures,%202011-2017.pdf
  6. ↑ Hero Worship (1 December 2012). "The ups and many downs of Irish business in a hugely eventful year – Irish, Business". Independent.ie. Retrieved 22 December 2012.
  7. ↑ This week's Sunday Independent (4 December 2012). "Davy makes €9m profits despite tough conditions – Irish, Business". Independent.ie. Retrieved 22 December 2012.
  8. ↑ The best apps of 2012: (2 December 2012). "Bloxham won't be the last casualty of slump – Irish, Business". Independent.ie. Retrieved 22 December 2012.
  9. ↑ The Irish Times, 14 April 2014, Davy takes largest stake in restructured exchange http://www.irishtimes.com/business/sectors/financial-services/davy-takes-largest-stake-in-restructured-exchange-1.1761500
  10. ↑
  11. ↑ Christmas Gifts (28 November 2012). "Stock Exchange chief rules out merger with rival – Irish, Business". Independent.ie. Retrieved 22 December 2012.
  12. ↑ This week's Sunday Independent (2 December 2012). "Stock exchange told it must 'step up to the plate' – National News". Independent.ie. Retrieved 22 December 2012.
  13. ↑ "Thu, Apr 15, 2010 – 'Unacceptable' block on ISE complaints". The Irish Times. 4 April 2010. Retrieved 22 December 2012.
  14. ↑ Alex Ferguson: (28 November 2012). "Exchange's losses soar to €15.5m as sales tumble – Stocks & Markets, Business". Independent.ie. Retrieved 22 December 2012.
  15. ↑ Holly Carpenter (2 December 2012). "Elderfield's stockbroking probe long overdue – Business". Independent.ie. Retrieved 22 December 2012.
  16. ↑ Alex Ferguson: (2 December 2012). "Bloxham closure: Watchdog probes all stockbroking firms – Irish, Business". Independent.ie. Retrieved 22 December 2012.
  17. ↑ "Central Bank finds major problems with stockbrokers". Irish Independent. 22 January 2013.
  18. ↑ "Calls for top-secret report on brokers to be released". Irish Independent. 22 January 2013.
  19. ↑ Surge of state bonds posted in error by Exchange

External links

Coordinates: 53°20′42″N 6°15′42″W / 53.345031°N 6.261734°W