Liverpool's Recipe for Recovery; Small and Medium-Sized Firms Are Our Only Hope for Job Creation, Says Exchange Boss. Peter Elson Reports

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Byline: Peter Elson

LONDON Stock Exchange chief Xavier Rolet has hailed Liverpool as a crucial player in the UK's post-recession recovery.

He gave Liverpool a ringing endorsement as the UK's second most important financial centre outside of London.

By setting an example of growing Liverpool city region's numerous small and medium sized businesses (SMEs), it could take the lead in resolving national long-term unemployment.

But he expressed surprise that Liverpool was so poorly represented on the London Stock Exchange (LSE), given this continuing success.

The architecture and history-loving LSE chief executive appeared appropriately at Liverpool's stunning Georgian Town Hall to meet and rally local business leaders.

He gave a keynote speech at the Access to Corporate Funding, the Role of Equity Capital Markets seminar, organised jointly by the LSE and Shore Capital, of London, on Friday.

"We are very excited about being in Liverpool. It's the second biggest UK financial centre," said Mr Rolet.

"That is an asset and competitive advantage that the North West community should use more.

"There are a lot of capital, asset managers and entrepreneurs in Liverpool, not forgetting its universities, which are so important for business.

"Yet only 116 companies from the North West are listed and this is not a true picture, with Liverpool showing less than Manchester and Scotland.

"We are confident over time the Liverpool listings will increase, as it has all the right ingredients."

Speaking about Liverpool's decades of brain drain and inability to retain local talent, he said: "A lot of companies run by Liverpool senior managers may not, of course, be based here.

"Our job is also about finding new investors and we would like to see more Liverpool companies working with local entrepreneurs," he said.

There has been a "climate of fear" in the markets, so SMEs do not consider flotations, although brokers and investment banks are in Liverpool.

"We know traditional sources of finance are restricted, but we are still here and want to encourage your SMEs to look at the equity and debt markets. '"A debt market is open for business, too, and can accelerate the rate of growth. the West listed' "Local investors should be encouraged to invest in SMEs, who can go for an IPO (initial public share offer) and these bend as low as pounds 1 a share.

"This facilitates access to everyone, and Liverpool has a lot of money which can be used this way.

"The Stock Exchange has helped to raise pounds 161m and markets continue to function well in spite of excessive debt.

"Many of the issues have been through IPOs of pounds 10m, pounds 20m, pounds 45m and pounds 50m.

"We're talking about financing the way out of the UK's long- term unemployment problem. Who else can do it? The public sector is shrinking and blue-chip companies are fighting to maintain their stock of employment, or to delocalise staff (out of the UK) to remain in business.

North "The only potential is the SME sector, it's the key to economic recovery. There is a need for growth and yield which SMEs can offer.

are "It might not look impressive to raise capital through IPOs at pounds 10m or pounds 15m, but it's the only way to generate employment.

"There are 4.8m SMEs in the UK. Think of the power of each one creating a new job - it would solve unemployment. …