Tallinn/Riga/Vilnius, Nasdaq Baltic Market, April 29, 2015 – Nasdaq Baltic introduced the IPO Task Force Action Study and Action Proposals today: ’Promoting Baltic Economic Growth through IPOs’, incorporating a range of key policy recommendations and proposals for improving the market climate for IPOs and strengthening the ability of the Baltic capital market to finance growth companies. “Rebuilding IPOs in the Baltic Market to diversify long-term financing sources for companies and investment opportunities for investors is of key importance for us,” said Arminta Saladžienė, Head of Nasdaq Baltic. “We aim to ensure that the Baltic capital market serves for job creation, sustained economic expansion, and improves the competitiveness of the Baltic countries.“
The taskforce, which brought together representatives of the business and investor community, identified a range of measures to improve the flow of IPO listings, to increase market liquidity, and to further develop a broad based investor culture in the region. These include:
- Improvement of the market ecosystem to better serve companies at different stages of growth,
- Reduction of listing barriers, e.g., to ensure that local listing and disclosure requirements are in line with EU standards and remove extra requirements from local legislation where appropriate,
- Incentives for investors to invest in SMEs, e.g. public-private co-funding,
- Enhanced tax incentives where appropriate,
- The need for good investor relations and corporate governance standards for new IPO companies,
- An increase in the number of listed high-quality state-owned enterprises (SOEs),
- Boosting the level of free floats of companies already listed,
- Activating a corporate bond market.
“In the recent years, similar action plans aiming to enhance the IPO climate have been created in the United States, also in the Nordic countries. The main goal for each of those is to create an environment in which the stock markets could perform their main task in the best possible way: To help companies raise money efficiently and allow investors to invest their capital both into IPOs and on the secondary market,“ said Rauno Klettenberg, Head of Nasdaq Tallinn.
“Nasdaq Baltic has worked continuously to boost the Baltic market activity and visibility through shared trading systems, harmonized market practices and rules, and Market Making program - designed to increase liquidity,” said Daiga Auziņa-Melalksne, Head of Nasdaq Riga. “As a follow up to the IPO Task Force, several initiatives have recently been implemented to improve access to the capital markets for companies: An interactive IPO tool for potential issuers, fact sheets covering more than 800 companies traded on Nordic and Baltic markets, template documentation for bond issuers. Recently we also launched the First North Bond market that will let smaller companies raise additional funds in the capital market and provide more exposure opportunities for investors.”
About the IPO Task Force The IPO Task Force action plan and proposals has been prepared with the aim to strengthen capital markets and making them easier for companies to access for sustained economic expansion and job creation in the Baltic countries. The document has made series of detailed recommendations that can help shape a future Baltic capital market. An IPO Task Force in the United States was published in October 2011. The European Commission addressed conditions for IPOs amid the “equity gap” in European markets in its March 2013 Green Paper on “Long-Term Financing of the European Economy”. The same year, Nasdaq Nordic launched an IPO Task Force project in Sweden, followed by similar projects in Finland and Denmark. In March 2014, the Federation of European Securities Exchanges (FESE) together with other European capital market participants also launched an IPO Task Force project. And all with the purpose of improving the climate for IPOs. Nasdaq Baltic engaged representatives of the business and investor community in broad discussions. The present action and proposal plan summarizes the key findings. The full document is available to the public at www.nasdaqbaltic.com .
An IPO, or initial public offering, is a process through which privately owned companies sell shares to raise finance to fund their growth plans that can be traded publicly on exchanges. In recent years, policymakers and experts – central bankers, economists, academics, and financial market think tanks - around the world have increasingly recognized the vital importance IPOs play in driving economic and job growth. The funding of small and medium-sized enterprises (SMEs) is particularly important in economies across Europe and in particular in the Baltic economies, where, according to The SME Performance Review, European Commission, SMEs constitute 99.8% of all enterprises, employs 78% of all job-holders of private sector and generates 70% of total value added.
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