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Antoni Giralt

president of the Alternative Stock Market (MAB)

Economist Antoni Giralt is president of the MAB, deputy CEO of the Barcelona Stock Exchange and a member of the Coordination Committee for the Spanish Stock Markets and Exchanges (BME). He worked as a financial analyst until 1981, when he joined the Barcelona Stock Exchange, and has since held a number of positions in this institution. He also teaches, gives conferences and collaborates on topics related to the stock market for seminars and the media.

In 2009 the Alternative Stock Market (Mercado Alternativo Bursátil, MAB) was started up for growing companies, a market tailored to small and medium companies to provide them with funding, notoriety, value and liquidity. Presided over by Antoni Giralt, the MAB currently includes eight companies from a number of sectors: biotechnology (Catalan company AB Biotics and Neuron Biopharma), healthcare (Medcom Tech), new technology (Let’s Gowex), childhood (Imaginarium and Zinkia Entertainment –creators of Pocoyo–) and communication (Bodaclick and Negocio&Estilo de Vida). As a whole, these companies have received a total of 54 million euros in funding from the market over the past year. The MAB has its offices in the Barcelona Stock Exchange Building, on Passeig de Gràcia.

Why was the MAB created?

The MAB is a stock market designed for small and medium companies. Historically, traditional stock markets are configured for companies of a certain size. In Spain, there are more small and medium companies –99% of the total– and their contribution to the economy is highly important as they generate two thirds of the total GDP and employ between 75% and 80% of the total workforce.

What other references are there in Europe?

The two references in Europe are in the United Kingdom, which has the Alternative Investment Market, at the London Stock Exchange, which dates from 1995 and includes some 1,500 companies, and the Alternext in France, at the Paris Stock Exchange, which celebrated its fifth anniversary this year and includes 130 companies. These are the references we used in starting up this market in July of 2009, originally with two companies and an additional six joined this year.

What type of companies trade on the MAB?

The MAB was created with the idea of being an open market without restrictions regarding the type of company traded. It is a market where companies seek funding. Thus, the characteristic all companies have in common is that they aim to grow and expand, in the broadest sense of the word, meaning increase their production capacity, geographic reach, R&D&i, etc. Moreover, the market does not limit companies based on sector. Clearly, there are sectors where growth is a more important characteristic and there may be more companies from these than from other sectors, above all in companies related to R&D&i. Sectors like biotechnology are clear candidates to trade on this market.

And why is the MAB suitable for biotechnology companies?

An important characteristic of the MAB is that it is accessible to companies from sectors that are not represented, or only to a minimal degree, on the traditional stock market, like the biotechnology sector. Moreover, biotechnology companies are normally quite young and have high potential for growth.

There is no requirement regarding the age of the company to join the MAB. The company only needs to have closed one fiscal year (one balance sheet and one operating income report). In order to trade on the traditional stock market, a company must have a history of at least 3 to 5 years. This automatically excludes companies that are started up and need funding, but don’t have access due to the requirements of the traditional stock market.

How can Catalan companies find funding through the MAB?

Basically, this funding is an increase in capital, using their own resources. In fact, this is what all the companies have done so far. From amounts of 2.5 million euros, the company that needed the smallest amount from the market, to 12 million euros. In total, eight companies have received 54 million euros from the market in one year. However there are also other reasons to trade on the MAB, for example if one of the stockholders wants to get rid of their shares and allow new stockholders to participate.

What advantages does the MAB have compared to the traditional stock market?

The main advantage is that it has been adapted to small and medium companies. It is a self-regulating market, so the market itself establishes the regulations. The traditional stock market is more rigid in design and has regulations that apply equally to large and small companies.
Another advantage is its flexibility. We try to be as flexible as possible. Getting rid of anything that is not absolutely essential, but respecting three basic principals: transparency, protecting minority investors and liquidity.
What does a company need to do in order to go public on the MAB?

The first step is to speak with a registered advisor. There are 27 advisors registered with the MAB, which are companies that have proven that they have the capabilities and are suited to bringing companies to the market. The registered advisor will evaluate whether the company is suited to the market and check that it meets the requirements. They help the company prepare the required documents and guide them throughout the process.

What are the MAB’s expectations for the future?

We are satisfied with our current pace. We believe that as the market becomes more well-known, it will help companies develop. When we started, we carried out a study that showed a total of more than 5,000 companies in Spain that could potentially trade on this market. One quarter of those companies are in Catalonia.

What fiscal incentives are there for companies that trade on this market?

We believe, and we have asked for it publically and seen it in other European markets, that fiscal incentives are important to the development of these markets. Markets work when there are companies, but also when there are investors. We believe that investment incentives are important in that investors are betting on the future and have a higher level of risk than in other investments. They are investments with lower liquidity. In order to compensate for this and help investors, fiscal incentives are important.

Catalonia was the first Community to implement fiscal incentives. Madrid has also done so and other Communities have projects underway to do the same. The incentives offered by the Government of Catalonia are based on income tax deductions and are aimed at investors and Catalan companies. However, we would like for these measures to spread to all regions of the country and, apart from the regional deductions, we would also like to see them on a national level. We would also like for there to be aid for companies. Some Autonomous Communities and the Ministry of Industry-ENISA offer subsidies and loans to cover the expenses of going public on the MAB.

What advice would you give companies that are thinking of going public on the MAB?

I would tell them that it is important to diversify funding sources with the opportunity to expand the company using their own resources. Going public on the stock market is an important decision, because it is the beginning of a new stage and a new approach to the business strategy. It also requires an effort in terms of transparency but brings companies increased notoriety and more professional management. Going public on the MAB is a turning point in the history of any company.

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