# The International Stock Exchange: Global, responsive, competitive

- Link: https://www.directorstalkinterviews.com/the-international-stock-exchange-global-responsive-competitive/4121032646
- Published: 2021-11-11T07:17:22+00:00
- Author: Amilia Stone

**The International Stock Exchange** (TISE) is a stock exchange based in Guernsey
currently specialising in listings, notably for bonds. It has been growing strongly
for six years, and is looking to diversify its core business into related areas.
In particular, it is looking to expand its share of securitisation listings, and
has just launched a professionals-only market, QIBM. TISE is a high-margin, cash-
generative, profitable business with a strong balance sheet. It is well-positioned
to adapt to the constantly evolving regulatory environment, in our view.

 * **Strategy:** TISE specialises in listings that are sought for technical reasons,
   typically to ensure tax advantages or lower costs, while still being on a recognised
   exchange. It does relatively little trading; most of the assets are held to maturity
   by professional investors. It is well-located and highly efficient.
 * **Opportunities:** The International Stock Exchange currently has just a 3% share
   of bond listings in Europe, and it has revamped its offer with a new market for
   qualified investors only. It has attracted some important new members in Ireland,
   and is phasing out membership fees. It is introducing a new trading system to
   help build liquidity.
 * **Valuation:** There are no directly comparable listed companies – other traded
   exchanges are substantial trading venues. We have used a DCF model with a high
   15% discount rate to reflect the current regulatory uncertainties. Our derived
   central value is £64m, or 2,275p per share.
 * **Risks:** TISE’s main threat comes from changes to regulations that might make
   its venue uncompetitive. The risk from rule changes initiated by the UK Treasury
   seems to be less severe than first anticipated – the definition of who may qualify
   may prove too narrow or complex to make switching from an overseas listing worthwhile
   for many issuers. In addition, its reputation for probity is important for attracting
   listings and approval from various international bodies. Its own shares are illiquid,
   and typically trade only a few times each quarter.
 * **Investment summary:** The International Stock Exchange aims to expand its customer
   base and build on its growth record. With a strong track record and robust balance
   sheet, we believe TISE is well-placed to diversify its revenues and continue 
   to trade very profitably.

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