Exclusive: Scottish Government “welcomes” new Scottish stock exchange

Nathanael Williams

Secretive stock market founders get thumbs up from government 

THE Scottish Government has said it would "welcome" plans to launch an independent Scottish stock exchange.

The comments were made in response to news that a group of former Nasdaq traders have submitted an application for approval to create Scotland’s first exchange since 1973.

The mysterious group has so far remained anonymous, saying only that more details about who is involved will be forthcoming if ‘Scotex’ receives approval.

A Scottish Government spokesperson told CommonSpace: “The Scottish Government recognise that stock exchanges are an important platform for companies to raise capital for growth investment, while also offering investors the opportunity to contribute to the development of listed companies.
“For these proposals to be taken forward it will be important to develop traction from investors and participating companies. The stock exchange initiative could help increase the flow of capital which we would welcome."

Between 2013-14 and 2014-15, total capital expenditure to be met from capital resources fell by 2.4 per cent (£0.06bn).

This statement comes in the light of the UK-wide vote to leave the European Union (EU) and fear of the vote having a negative effect on the Scottish economy. There has also been mention in the media of Edinburgh potentially outgrowing London as a financial hub as a result of major European banks moving from the city after Brexit.

Additionally, CommonSpace this week covered the Scottish Parliament committee of external affairs and Europe which took evidence from all sectors on the effect of Brexit on Scotland's economy. 

According to Scottish Government figures on capital returns, between 2013-14 and 2014-15, total capital expenditure to be met from capital resources fell by 2.4 per cent (£0.06bn), demonstrating the difficulty there has been in finding new capital investment.

"The stock exchange initiative could help increase the flow of capital which we would welcome." Scottish Government 

The Fraser of Allander Institute, already in a recent report, said: "Over time, investment is likely to be lower as a result of inevitably higher long-term interest rates, lower inward investment and slower economic growth and, of course, the substantive increase in political and economic uncertainty surrounding the UK.  

"Access to the European Regional Development Fund, European Social Fund and European Investment Bank is threatened, with no plans as yet for what will take their place.  

"If as predicted, there is a further round of austerity, infrastructure investment may fall."

In an updated statement on the Scotex website, the company has noted that "there is a very good case for Scotland having its own equity capital market irrespective of the outcome of political events."

This could be important given that the political uncertainty created by the vote to leave the EU has meant a downward spiral in confidence among businesses and investors. It is thought by economic experts, such as the Fraser of Allander institute, that capital investment being already low pre-Brexit will take a hit as a result of vote.

The statement from the Scotex group, to create the stock exchange regardless of the outcome of Brexit negotiations, could mean a much-needed increase in capital investment from private businesses and the Scottish Government.

Picture courtesy of Scotex

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