This year has been slow for the flotation market.
In the first half of the year, there were 39 initial public offerings (IPOs) on the London Stock Exchange, raising €3.5bn (£3bn) – down from 55 raising €9.3bn in the same period last year, according to figures compiled by PwC. It has been a similar story on other large exchanges across the world.
But one market that thinks it is bucking the trend is Nasdaq Nordic, the European business of the US exchange, which operates in Finland, Denmark, Sweden, Iceland, Latvia, Estonia and Lithuania.
In fact, with 47 floats in the first half of this year raising €4.2bn – a change from 55 raising €3.9bn in the same period last year – it is on a par with Nasdaq’s main US business. The current tallies stand at 52 in the Nordics, versus 53 in the US.
“Most of the companies here in the Nordics are not happy with just satisfying the local market,” Adam Kostyal, Nasdaq’s senior vice president of listing services in Europe, told City A.M., explaining the Nordic resistance to an IPO slowdown.
“You look at the dynamics of what a listing can bring a company. Yes, you look at the capital raising aspect, but that can be done outside of the exchange. You also have the visibility and the credibility that a listing brings them.”
Kostyal also highlighted the performance of Nasdaq Nordic's junior market, First North, which he believes can make gains on the London Stock Exchange’s alternative investment market (Aim). First North hosted 30 IPOs in the first six months of the year raising €419m, down from 38 in the same period of 2015. Aim had 23 raising €1bn, up from 21 last year.
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The UK’s EU referendum has been sighted as one reason for the slowdown in IPOs this year. Kostyal said this has not been an issue for Nasdaq, and could present an opportunity.
“We have not been impacted by the Brexit issue,” he said. “From our perspective, the Brexit issue has not been a set-back so far.”
He added: “Long term… if a European company is evaluating a listing venue – and Aim has been thriving off many European companies, not only UK companies – then they clearly would be very interested and they are indicating an interest in looking for alternatives.”