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The Role of Specialized Markets in Facilitating SME Access to Finance
In addition to venture capital and private equity funding, and as both alternative and facilitator of such funding, setting up specialized SME stock markets would serve frontier and emerging market economies well. Such specialized market segments enable Startups and SMEs to issue and list securities to raise growth capital, thus providing companies with an additional route to raise finance. These exchanges also provide additional exit options for investors, encouraging VC and PE funds to invest in SMEs. SME stock markets differ from regular exchanges in important ways: • SME stock markets are not so much about the trading of listed securities but rather the ability of SMEs to list securities to raise growth and expansion capital. • SME stock markets tend to underemphasize traditional listing requirements typically required by standard exchanges, such as a large minimum capital for the listed company and a minimum track record of profitability, and instead focus on strict disclosure and corporate governance requirements for listed SMEs. • SME stock markets play an important role in connecting and networking SMEs looking for expansion capital with VCs, PEs, Family Offices, and High Net Worth Individuals looking for seed, early stage, and expansion investment opportunities. • SME stock markets function as stepping stones for SMEs to grow and eventually list on the Main Boards (standard exchanges), should they choose to. • SME stock markets tend to be “uncorrelated” to the standard exchanges of their home countries and, as such, provide compelling investment opportunities to both retail and institutional investors for hedging purposes. • Due to the sectors they tend to focus on (e.g. technology or technology enabled and new economy sectors), SME stock markets play an important role in attracting regional and international FDI and Portfolio Investments into Frontier and Emerging Markets. An SME stock market could be set up as an additional segment to an existing stock exchange or as a standalone operation. It can be housed within a special economic zone or financial center, helping such centers and special zones realize their full potential by becoming vibrant hubs of business activity. Setting up a specialized SME stock market should be undertaken in partnership with a recognized international exchange, with the latter contributing: 1) the technology 2) the business model, and 3) the brand. It is worthwhile to note that SME stock markets have been launched in several Arab countries such as Egypt, Saudi Arabia, and Dubai. Superimposing a technological solution to connect these markets to create one regional or quasi regional Middle East SME market with multiple entry points and a harmonized set of listing, disclosure and corporate governance rules would increase the size of the liquidity pool available to Middle East SMEs to raise funds from and facilitate mergers and acquisitions across geographies and the creation of regional heroes.
Jun 7, 2022 · 3 min read
From A Long Conversation With Myself
It was not long before he was born He managed to convince you That your skin is fairest That your blood is purest That your language is divine That your land is holy That your presence is God’s will And God said I want nothing to do with this He clawed you back into a deep well From which no light escaped Its waters rancid Its air rank The darkness that was before Everything came to be And the Devil said this has nothing to do with me Afterwards, he sat on a porch In a wooden chair With a smirk on his face Watching you walk down the street Dazed and confused …
May 31, 2022 · 1 min read
Anna Netrebko and Abraham's Foot
It was a balmy May afternoon a few years ago and I was in a minicab heading from North London to the Royal Opera House in Covent Garden. Anna Netrebko was doing Mimi, and although her Musetta’s Waltz is one of my favourites (her encore of the aria at the Waldbuhne a few years ago when she ditched the microphone, singing at the top of her voice to more than 30,000 people was an operatic highlight), it was not to be that summer. Still, one simply did not miss Ms Netrebko at the ROH if one were in London! I am a fan of Puccini and thoroughly enjoyed that evening, with champagne cocktails at the Aldwych preceding, the ROH’s great cuisine during breaks, and, well, La Boheme is a masterpiece. However, when I got back home, I found myself reminiscing not about Mimi, Marcello, and Musetta but about Abraham’s foot. That’s right; Abraham of yonder. Minicabs are a peculiar London detail. They predate Uber, compete with black cabs, and continue to rival both. And North London is full of mini cabs you’d wonder how people would get around without them. Little did I know, getting into my mini cab that afternoon, that a different kind of coup de theatre awaited me. My minicab driver had that generic London look; he could have been Jewish, Arab, Spanish, Greek, Scottish, French, you name it. He turned out to be an Iranian Zoroastrian, having supplied that detail after he inquired of me “where do you come from?” Jordan, I said, and the minicab driver complemented King Abdullah II on his stewardship in a turbulent region. He then asked if I knew what Zoroastrian is and I said yes, volunteering the details that came to mind. My driver then emphasised how old Zoroastrianism is, compared to Judaism, Christianity and Islam. To illustrate, he used the story of Noah’s flood, saying that the events are mentioned in Zoroastrianism’s holy book, which is at least 20,000 years old - so the flood could not have happened some 5000 years ago as “your books say.” I was both glad and intrigued by what he said. Glad that a London minicab driver had enough common sense to realise that Judaism, Christianity, and Islam do share the same foundations, and said as much. I mentioned to him that a famous mythologist, Joseph Campbell, thought that the three religions were basically one religion explained over time to different people through different metaphors and parables. My minicab driver did not seem to quite grasp what Campbell was trying to say but he did start talking about Noah and his ark. He said that Noah lived till he was 900 years old and that he was a giant. How else could he have built an ark to house all those animals. In those days, my mini cab driver said, there were giants living on earth as well as normal people. I “hmmm-ed” and nodded briefly, turning my head to look outside the car window to my right and avoid his piercing eyes reflected in the rearview mirror. Having sensed a certain doubt on my part, my minicab driver went on: When God created Adam and Eve, Eve laid with both Adam and the Devil, and she begat two races, the giants, who were the Devil’s descendants and were superior physically, mentally, and in every other way, and the normal humans who were Adam’s descendants and were, well, mediocre in every way. Noah and his ilk were descendants of giants, my minicab driver informed; how else could they conceive of and build such a thing as the ark. He said that giants continue to live amongst us today. They control the world, politics, banks, big companies. Giants make all the discoveries in science. They took us to the moon. Giants are the ones who built this car. My minicab driver then said: You are probably asking yourself why you do not see giants walking the streets these days. That’s because over so many years they intermarried with normal humans, so their physical shape became the same as ours but everything else is still giant quality, including how smart they are. Even this Abraham of yours, he was a giant. Really? I said. Yes, he said. Abraham would not fit in this here mini cab; you would need to get him a double decker red bus, like that one in front of us! My minicab driver then asked me, in a low voice: Haven’t you seen Abraham’s foot? I said, no, and asked what was that? Aghast, my mini cab driver informed me that there is a slab of stone in Mecca with a print of Abraham’s foot on it, preserved till today, and that the footprint is more than half a meter in length. If that was the size of Abraham’s foot, my minicab driver said, how big and tall do you think he was?
May 24, 2022 · 5 min read
Turkey, Nato, and Europe
Turkey's large military presence within Nato (second after the United States) served as a major deterrent during the Cold War. Can Turkey be relied upon today to support any contemplated Nato moves to counter Russia's in Ukraine? President Erdogan’s recent comments opposing Finland and Sweden joining Nato puts this in question. Europe, and specifically the European Union, lost a golden opportunity to bring Turkey in from the cold during the 1990s when Turgut Ozal was in power, when a customs union was put in place between the EU and Turkey, and when Turks of all strata were looking to Europe. By having Turkey join as an EU Member, Europe would have started a process of laying the past to rest - the shared history between Europe and the Ottoman Empire of conquest and counter conquest. Europe would also have contributed to and had an intellectual influence over Islamic reformation, drawing on its own Christian reformation experience. A Turkey in the EU would have had the benefit of European values, although much could be said of this influence on some East European EU Members today. A Turkey in the EU would have added economic strength to the Union and contributed a young, energetic labor force. A Turkey in the EU would have lessened the impact of populist forces worldwide by showing by live example that it is OK to accept different peoples with different religions and different ethnicities as long as there is a common frame of reference shared by all. How will Nato and Turkey deal with their differences on Finland and Sweden? And how will relations between Europe and Turkey be shaped by the moves of an aggressive Russia? The world has started realigning itself along different spheres of influence from those that we have come to know since 1945, and the times ahead will be full of new developments.
May 17, 2022 · 2 min read
Blind Man In The Rain
I had been working in doors all day and decided to go out for a walk around 6 PM. It was an odd decision, given that the weather service had all day been predicting heavy showers around that time. The sky was full of gray, low hanging clouds, yet I picked up my umbrella and strolled out. I took my usual route which typically leads me up Regents Park Road in Primrose Hill. I wasn't quite sure where I was going. Usually, I make my way to a restaurant, a coffee shop, or a newspaper agent, depending on the hour of day. This time, once I reached the park, I turned around and started going downhill in the direction I had come from. It had started raining and within seconds the sky managed to release a deluge. It seemed a good idea to seek the shelter of one of the pubs I frequented in the area but for some odd reason I decided to continue on back to the apartment I was staying at. Once I was close to Chalk Farm tube station, I saw a blind man trying to make his way under the heavy rain. He was wearing a navy blue suit with faint stripes, a tie, and a dark blue shirt. His hair was white and he gave the impression of being in his fifties. His blindness was of the kind that caused his eyes to stay shut all the time and he was banging the sidewalk nervously with his white cane, while his other hand clutched a charcoal laptop cloth bag. Water was pouring all over his face and clothes. I ran after him and, walking to the left of him, and asked if he could use some help as well as an umbrella over his head. He immediately grabbed my right elbow and thanked me and asked if I was the mailman. I said no but that I was staying with friends nearby and would be happy to walk him home. We walked slowly and he said that he worked in Holborn and takes this route every day. He said how grateful he was that I came along as he would have been drenched, which, indeed, he was a short way from being. What struck me about the blind man as I approached him with my offer of assistance was not that he was getting wet. Rather, the half frown, half confused look on his face which gave the impression of someone who was lost on familiar ground. The heavy rain and thunder seemed to have dulled the senses that a blind man would rely on for direction in drier circumstances. He was straining to hear the sound of his own footsteps and cane on the pavement, which, during a normal day, no doubt, had a familiar echo, depending on where he was in relation to his apartment building. He could no longer use his nose to identify routine smells along the way. Even reaching out with his hand to feel a certain brick wall would have been difficult and slippery. I was grateful for that blind man in the rain, probably more than he was for my presence. I had left the apartment I was staying at angry at some work and other developments in my life. The blind man reminded me that even when faced with such adversity as blindness, there is room for optimism; he could still find a job, work everyday and commute back and forth to his office. The blind man also reminded me that sometimes we do not understand the reasons for our actions at first, and all we have to go with is a gut feeling; an instinct of sorts. I certainly did not know why I was leaving the apartment at that time in that kind of weather. I had no specific place to be at. I could have sat on the couch and watched the evening news. But, I found myself helping a blind man walk from the tube station to his apartment building and realized afterwards that we do not need to understand everything fully from the start; sometimes the reasons for our actions become clear at the ends of our journeys. But most of all, the blind man reminded me that we all go blind once in a while in this life, even while walking on familiar ground, heading home. And we all need someone to reach out to us every now and then and ask if we need help or a shelter over our heads until the storm is over. I know that the blind man would never have stood in the rain asking for help; he would have tried and tried and tried until he made it to his apartment building. And he would have suffered needlessly in the process. He is too proud to do otherwise. So are you and me.
May 10, 2022 · 5 min read