AIM Italia - Ernesto Mocci - Methorios Capital

AIM Italia & MAC MTF’s‣ An additional event on the agenda is for Borsa Italiana to perform a London road show with 10 or more companies on AIMItalia that have strong growth stories and market caps in excess of € 30- 40 mln to London based institutional investors.‣ While all of these are positive steps, Borsa Italia faces a difficult task as institutional sentiment remains very cautious towardsinvestment in firms with market caps less that € 300 mln. This combined with the liquidity factor makes the AIM Italia andMAC markets a difficult investment story to sell.‣ To make matters more difficult there currently exists few listed companies that have equity research coverage (4 on MAC and2 on AIM Italia). If Borsa Italiana was to implement some form of incentive(s) to larger banks to widen their market researchand corporate brokerage coverage to incorporate AIM Italia and MAC listed companies it would go a long way to enhancemarket awareness and clarity of the twoMTF’s. As at now many larger financiali institutionsi i do not wish ihto devote theresources to provide these services as there currently does not exist the level of demand from investors both at a professionaland retail level. By developing systems for the Italian MTF listed companies it could potentially accelerate growth at a timewhen many investors are returning to equity markets.‣ From the beginning, i AIM Italia was unfortunate in bi being brought into the world at atime when financiali markets across theglobe were in the process of collapsing. However the market is still growing today and the quality of companies listing on themarket is improving. Foreign investors (UK and France based institutions) are watching but are of the opinion that there ispotential however that the market needs to develop a strong domestic presence. Tax incentives are all well and good but thereneeds to be strong domestic demand in order to attract foreign investors. This means more quality companies being listed andstronger market awareness by Italian institutions.‣ MAC on the other hand has been in existence since the founding of Pro MAC in 2005 (first listing September 2007), howeverit has not seen a significant amount of growth in these 5 years. The number of listed companies remains significantly low (8listings) and the levelel of trading by institutionstions on the market does not really appear to jstif justify its eistenceas existence a marketplatform. A number of institutions remain hesitant to increase activity on this market as it appears that Borsa Italiana remainsuncertain whether there exists the demand for two small/micro cap MTFs. It is quite possible that in the medium term, BorsaItaliana may attempt to integrate the two. This is somewhat unfortunate as the market was created on the initiative of 17 largefinancial institutions and 7 predominant associations in Italy (shareholders until 09/09/2010). 00). This was a significantfoundation to draw vast expertise and resources that one would believe have enabled an improved scenario than to whatexists today. This market is forecasted to continue a small level of growth for 2011 with another 3 to 5 listings.23