Nasdaq Helsinki's IPO Ground Work .

Part 2 of a two part series on the current IPO environment in Finland.

Nasdaq Helsinki's IPO Ground Work

This is the second part of the current IPO environment in Finland. Part 1 of this two part series, Why Has Nasdaq Helsinki Seen a Dramatic Increase in IPOs? and explored the factors for the rise in IPOs at Nasdaq Helsinki.

In a recent article for Kauppalehti (The leading business daily in Finland), Hans-Ole Jochumsen, President, Nasdaq noted that the importance of local marketplaces and exchanges such as Nasdaq Helsinki to provide access to capital in order for companies to grow and innovate.

Jochumsen noted that "It is vital for Nordic countries to have a healthy local investment community and well-functioning capital markets. If they were to relocate, the economy would be harmed in the long run regarding growth, job creation and prosperity." He noted that when a Finnish company wants to raise capital, it is important to have a local marketplace.

In our previous MarketInsite post, Why Has Nasdaq Helsinki Seen a Dramatic Increase in IPOs?, the factors for a record number of IPOs in Finland were reviewed. The 2nd part of the story involves the groundwork that Nasdaq undertook to create and bolster an understanding of the value of the local capital marketplace.

It all started with a local effort, so when Lauri Rosendahl joined Nasdaq as the President of the Helsinki Exchange in 2009, one of his many tasks was to work on IPOs.

Rosendahl, supported by an ambitious two-person team at Nasdaq Listing Services in Helsinki, decided to raise awareness of the basic functions of the exchange for raising capital and to reignite public interest in exchange listings.

It meant a simple plan of continuous hard work, such as:

  • Numerous meetings with CEOs and owners in potential IPO companies, often based on ‘cold calls’, meetings with institutional investors and investment banks to build commitment on the demand side and in advisory services, and government representatives.
  • Using numerous speaking opportunities in all potential forums and in media interviews to reiterate the basic messages. In this respect, the 100-year celebration of the Stock Exchange in Helsinki in 2012 provided a lot of exposure for the Nasdaq and capital markets.
  • Educational meetings with government Ministries and members of the Parliament, including all political parties from left to right.
  • Arranging media background events focused on capital markets and what they mean for start-up companies.
  • Proactive visibility throughout the ecosystem and in particular in selected start-up events like Slush, Polarbear Pitch, Midnight Pitch Fest, Arctic 15, Cleantech Venture Day, Kasvu Open, Mining Industry events, etc.
  • Creating good relationships with organizations, such as chambers of commerce, embassies, and industry-specific associations.

One of the trend changing initiatives was the IPO Task Force work in 2013 and 2014, with extensive workshops for stakeholders, which resulted in 25 proposed measures to improve the listing environment in Finland. Approximately 10 of the measures have been completed, and 15 are still in progress, but the process thus far has had an enormous effect on the overall sentiment around new listings.

To be continued …

The positive momentum of new listed companies is now an overall positive signal for Finland, a country that still suffers from slow economic growth. In recent months, Finnish media have played stories that imply that recent IPOs may be signaling an overall economic turnaround. The emphasis has been that , these newly listed companies have raised capital which will be invested and in turn will help other businesses and provide new jobs.. Exactly the story we have been communicating over the years.

However, the government has so far done little to encourage ordinary people to invest in domestic companies coming to the public market. Even the tax paid on dividends of an unlisted company is still lower than that of a listed company. The government has in its four-year program committed to look into many things, such as the dividend taxation issue and also savings incentives.

All in all – the work of the Helskinki Exchange continues, but fortunately on a much more positive note than a few years back.

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