Listing on the Spanish
Stock Exchange
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STRUCTURE ORGANISATION AND OPERATION
OF THE SPANISH SECURITIES MARKET
HOW TO BE LISTED
The general procedure for a listing is to make a pu-
blic offering of shares before requesting permission to
trade. The operation achieves the required dissemina-
tion, diversification of shareholders and the necessary
liquidity for floatation.
The phase of selling or placing shares on the mar-
ket is the most important part of the process prior to
their appearance in the trading lists. An essential ele-
ment here is the advice and participation of a market
member and/or banks with large branch networks.
Placement of old shares is the best solution for
companies that want to sell treasury stock or have sha-
reholders who wish to divest their shares in the com-
pany.
If the aim is to capture a large volume of funds via
a capital increase, the option is to place new shares.
Normally there is a public or private subscription offe-
ring, i.e. the subscription rights are sold and investors
immediately subscribe to the capital increase contribu-
ting, if required, the corresponding premium.
If the aim is to capture a large volume of funds
and to diversify the shareholder base, the placement
tends to be public, particularly in the event of greater
demand than supply, when the pro-rata rules facilitate
the entry of minority shareholders of a strictly financial
nature, who do not pose problems for management. A
private placement, meanwhile, makes new sharehol-
ders better known and enables the stock to be monito-
red on the market.
The price set is one of the essential components
in determining the success of the listing.
The valuation of the shares calls for a profound
analysis of the company and comparisons with firms
of the same sector whose shares are listed so that a
competitive and attractive price can be set.
The price should take into account profit pro-
jections, the company’s theoretical value and the
stock market situation. The optimum price, howe-
ver, does not have to coincide exactly with that of
the financial design of the operation and should take
into account other factors such as the company’s ex-
ternal image and not overlook the fact that bullish
periods enable a higher sale price to be set and vice
versa.
Recent placements of shares have established a
range of maximum and minimum prices and, once
the period of gauging demand is over, the definitive
price is set.
Different valuations can also be made on the
basis of the types of investor the company wants to
attract. A price can be set for institutional investors,
another for retail investors, a different one for fore-
ign investors and even one for current and retired
employees.
Once the placement is over, permission is
sought for trading. This process should start at the
same time as the placement period in order to facili-
tate the stock’s immediate trading.
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