Warsaw Stock Exchange is establishing a special segment for NewConnect-listed companies called NewConnect Lead. The segment will be distinguished in order to promote outstanding companies on NewConnect and to separate companies that have highest chance of being upgraded to the WSE Main List.
There is a group of companies that plan transfer to the WSE Main List and the odds that they meet the Main List admission criteria are very high. The NewConnect Lead segment is supposed to provide such issuers an additional drive and incentive to transfer to the WSE Main List.
Companies that meet all criteria listed below will be qualified to the NewConnect Lead segment:
- The average market value of the issuer in the last 6 months was at least € 5 million and free float measured at the end of each quarter was at least 10%;
- The average trading value per session or the average number of transactions in the last 6 months have to be PLN 10,000 or 5 transactions respectively;
- At least have of trading sessions at which transactions were concluded in the last 6 months;
- Stock price volatility in the last 6 months – below 15%, and the average price in the same period has to be above PLN 0.50;
- Being a public company for at least 1 year;
- Application of Best Practices;
- Quality of reporting performed by the company.
The companies will be selected on the basis of quantitative and qualitative terms. The first companies will be classified into the NewConnect Lead segment on 31 March 2010. This will be done through positive selection process, which means that all companies that have met the above eligibility criteria will be qualified to the NewConnect Lead segment. Number of companies in the segment will vary, and its composition will be updated on a quarterly basis. After closing of the last trading session in March, June, September and December each year, the WSE will revise qualification indices and the composition of the NewConnect Lead segment. During periodic revisions the focus will on data for the last half of the year of activities of companies listed on the NewConnect market.
Recent months of investors’ activities on the NewConnect market proved a need to set up such a segment. In January this year the turnover value on the NewConnect market was the highest ever and totalled PLN 322 million. The turnover in February was also very high and its value exceed PLN 256 million. In both months the turnover value on NewConnect was several times higher than the trading value of 100 smallest companies from the WSE Main List.
Two companies listed previously on the alternative trading system, i.e. MW Trade and Centrum Klima, already moved to the WSE Main List. Their more-than-a-year experience gathered on the regulated market proves that they had made the right decision.
In terms of trading liquidity and number of IPOs, NewConnect stands out against other European alternative trading systems (occupies second place in Europe according to the findings of the IPO Watch Europe PwC 2009 survey). Currently 116 companies are listed on the NewConnect market, but consecutive companies are in the IPO pipeline in the weeks to come.