Why do public markets matter?

As businesses grow and reach a certain size and maturity, it becomes possible for them to access this funding through public markets. Companies will transition from private to public markets for several strategic reasons, primarily relating to capital generation, visibility, and liquidity. A recent innovation that aims to help with this transition is the Private Intermittent Securities and Exchange System (PISCES), a new type of stock market that will allow for trading of shares while a company remains private. Public growth markets will typically suit more mature companies with different needs, including higher liquidity from continuous trading, a broader retail investor base, the opportunity for new capital raising and increased public visibility.

Public markets function as a convener of a broader base of those who have capital (investors) with those who need capital (businesses). There are several benefits to public markets:

They offer an important path for governments to democratise access to investment opportunities, as they allow a wider range of investors to participate.
Unlike private markets, public markets allow investors to buy and sell their shares quickly, giving them access to capital when needed.
They can help to stabilise the financial system and support economic recovery in times of need. Over £7bn of new money was raised by UK listed companies, with £450m of secondary raises on AIM between 18 March 2020 and 9 April 2020 that supported businesses to re-establish their normal operations through the unprecedented stress of the Covid-19 crisis.^10,11
The public nature of the companies on the markets means the capital is managed within an open system. Publicly traded companies are required to disclose certain information and adhere to regulatory requirements, both of which provide a level of protection for investors.

SulNOx Group

based in London develop natural biodegradable solutions to decarbonise liquid hydrocarbon fuels, reducing the production of harmful, environmentally damaging greenhouse gas emissions. With an international business model they could have chosen to go public in a number of regions. The main reason for choosing the UK was access to UK capital which allowed them to finalise development of their fuel additives.

They were admitted to Aquis Growth Market in 2021. The market has given them credibility when negotiating with much larger business partners around the world.

Within public markets, there is a distinction between those markets designed for smaller businesses that may be at an earlier stage of growth, and those for larger and potentially more mature businesses. Public markets give companies a sense of place, helping them to build visibility and cement ties in the country in which they choose to list. The companies that go public on these markets in the UK make a real contribution to the economy—directly through the value of goods, services and job creation, and indirectly through supply chains and employees’ wages spent on goods and services supplied by UK businesses.