West Mids reveals mixed reaction to regional stock exchange proposals
Following business secretary Vince Cable’s proposal for regional stock exchanges, the chief executive of the West Midlands’ inaugural virtual business exchange InvestBX says she is “delighted” that the issue is back on the agenda. However, Birmingham Chamber of Commerce (BCC) told Insider that it “remains unconvinced” by the proposals, as the region's first exchange has only three members.
Cable revealed the green paper plans for local stock exchanges to encourage lending to small and medium sized businesses and lessen reliance on the city’s stock exchange.
And while Sue Summers, chief executive of InvestBX, is strongly in favour of the scheme to extend nationwide, the BCC is not convinced it is the right choice.
A spokesperson for BCC said: “To this day, there are only three registered companies listed with InvestBX. While the chamber would in theory welcome a reinvention of regional stock exchanges, we are cautious that many of our members are not in a position to take advantage of such an initiative because of cash flow issues.
“This recession has thrown up hundreds of insolvencies in the West Midlands and the government must ensure that its support is geared towards helping those surviving firms keep afloat.”
However, Summers feels that local firms would benefit from such a system. “We strongly agree that it’s vital that lifeblood businesses of the regional economy get the help they need while at the same time we reduce the UK economy’s dependence on the city of London," she said.
Cable announced proposals for local stock markets in a bid to enable small and medium sized businesses to attract investment.
“It is clear that innovative ways of securing investment will be necessary to help regional companies to grow," said Summers. “Regional exchanges, we believe, are just one of the ways this could be achieved.”
However, the chamber does not believe that re-inventing an as-yet unsuccessful system is the answer.
“With doubts over the recovery, uncertainty amongst local businesses is high," said the BCC spokesman.
“We would argue whether this proposed plan would be the best way to encourage our members to regain confidence and provide better access to finance thus enabling them to invest in their organisations and begin to start operating at full capacity. We remain unconvinced.”
