Tumbleweed time in the Irish Stock Exchange

So the Irish Stock Exchange held  a conference  with EI on why companies should consider floating . As Simon Carswell says, its now time for the ISE to think long and hard about what it is it wants to be. One of the problems that bedevils the exchange is that it is no longer fulfilling one of its main roles, that of primary lister. The flow of IPO’s onto the Irish exchange is very poor: In Q2 2012 one exploration companies –Fastnet-  listed.  No companies listed in Q1 2012

A second major function of stock exchanges is to act as a price discovery mechanism. In this too the ISE is not exactly winning. I downloaded from Datastream the list of constituents of the ISEQ, and show below the number of days on which there were recorded zero volume, and the average daily turnover as a % of market capitalization. All data are for the last two years. In reading this bear in mind that the ISE trading mechanism is the Deutsche Bourse Xetra system therefore there are days when that system is open for trade but are holidays in Ireland. Leaving aside then the number of companies that show zero vol on a dozen or so days we see that for a not inconsiderable number of companies there are many many days when nothing happens…. This is hardly an effective way to discover prices for these companies and one wonders what they are doing on a listed exchange. Sure, the IPO proceeds can be put to good use but as an ongoing price discovery mechanism this isn’t working..