Liquidity preference

Low-cost stock markets with "streamlined" regulatory constraints for small-to-medium sized companies again are all the rage in Europe, with other bourses seeking to emulate the success of London's AIM. But while the re-emergence of lightly regulated European stock markets may make it easier for smaller companies to go public, it is unlikely to make it any easier for these companies to raise additional public equity funds.

The first to take the plunge was the Dublin Stock Exchange, which established the Irish Enterprise Exchange in April. Euronext quickly followed suit by launching Alternext in May, while the Deutsche Borse last week unveiled its Entry Standard Market targeting small cap companies. OMX, the Scandinavian exchange, is expected to launch a similar market in Denmark in December. ...