Irish Stock Exchange

Irish Stock Exchange Stocmhalartán na hÉireann
Type	Stock exchange
Location	Dublin, Ireland
Coordinates	53°20′42.2″N 6°15′41.7″W / 53.345056°N 6.261583°W / 53.345056; -6.261583
Founded	1793 (1793) 1799 (statutory)
Owner	Irish Stockbrokers
Key people	Deirdre Somers (CEO) Padraic O'Connor (chairman)
Currency	EUR
No. of listings	59[1]
Market cap	EUR124.7bn (2014)[2]
Indices	ISEQ 20
Website	ise.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.^[3] 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).

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. In 2014 it changed its corporate structure and became a plc.^[4]

The Irish Stock Exchange is a global leader in the listing of debt and fund securities and is the centre of liquidity for trading shares in Irish companies. With over 32,000 securities listed on its markets, the ISE is the exchange of choice for over 4,000 issuers from 80 countries to raise funds and access international investors.

A study by Indecon (international economic consultants) published in 2014 on the Irish Stock Exchange found that having a local stock market and securities industry directly supports 2,100 jobs in Ireland and is worth €207 million each year to the Irish economy. It also found that having a domestic securities industry centred on the Irish Stock Exchange generates €207m in estimated direct economic impact (measured in Gross Value Added or GDP) and €230m in direct tax for the Irish exchequer (including stamp duty on trading in Irish shares).^[5]

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.

Markets

The Irish Stock Exchange operates 4 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; the Global Exchange Market (GEM), a specialist debt market for professional investors and the Atlantic Securities Market (ASM), a market dedicated to companies who wish to dual list in Ireland and the USA.^[6]

The Royal Exchange in 1837

Company Listings

In 2014 three companies joined the ISE’s markets: Dalata Hotel Group, the largest hotel operator in Ireland, Irish Residential Properties REIT plc, the first residentially focused REIT to list in Ireland and Mainstay Medical, an Irish medical device company.

These three companies raised a combined total of €484m at IPO. Total fund raisings in 2014 of listed companies was €1.3bn.^[7]

In 2015 the largest biotech ever to IPO in Europe took place on the ISE when Malin Corporation, the Irish-based global life sciences company, raised €330m from international investors in an exclusive listing on the ISE.^[8]

The ISE is the main centre of liquidity in Irish shares. The highest turnover in the ISE is in CRH. This is followed by Bank of Ireland, Smurfit Kappa, Ryanair and Kerry Group.

In 2014 equity trading volumes were up 29.8% on 2013 to 4.5m and equity market turnover reached €63.5bn, up 10.2% on 2013.^[9]

Trading volumes on the exchange in 2011 were about a quarter of the 2007 peak. 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." ^[10]

Between 1973 and 1986 there were no new company listings.

Debt and fund listings

The ISE is a leading centre globally for the listing of fund and debt securities with over 4,000 issuers located in 80 countries choosing to list their securities on the ISE.

In 2014 the ISE also launched www.isefundhub.com an information portal for funds listed on the ISE that displays important information such as fund net asset values (NAVs) and key fund documents, as well as extensive performance based analytics.^[11]

Trading Systems

On 6 June 2000, the ISE closed its trading floor in Anglesea Street (a listed building),^[12] 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. It is supported 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.

Other Services

Processing of Legal Entity Identifier (LEI) services for Ireland. LEIs are codes designed to create a global reference data system that uniquely identifies every legal entity or structure, in any jurisdiction, that is party to a financial transaction. Businesses may apply for an LEI code through ISEdirect^[13] LEIs were brought in by global regulators as part of the response to the global financial crisis. The ISE is the designated body to process these codes in Ireland.^[14]

International Securities Identity Number (ISIN) services. ISIN is a code that uniquely identifies a specific securities issue. The ISE is the National Numbering Agency in Ireland for ISIN codes and is a member of the global industry body the Association of National Numbering Agencies.^[15]

Announcement Services. The ISE files and publishes announcements for issuers which enable them to comply with their regulatory obligations. ^[16]

Information Services. The ISE publishes a range of equity and fund indices. The published index of shares is known as the Irish Stock Exchange Quotient or ISEQ Overall Index. Other equity 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.^[17]

The ISE also publishes a range of bond indices.^[18]

Ownership

The exchange is a plc owned by a number of stockbroking firms.^[19] 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.

Ireland 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.^[20]

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.”

In April 2010, Financial Regulator 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.^[21][22]

The Central Bank began an unprecedented investigation into the entire stockbroking community in December 2011.^[23][24] 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.^[25][26]

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.^[27]

List of companies listed on the ISE

• Enterprise Securities Market (ESM)
• List of stock exchanges

References

External links

• Irish Stock Exchange official website
• http://www.ise.ie/Hidden_Loc/ISE%27s-Delegated-Activities-from-the-Central-Bank-of-Ireland.html

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