Nasdaq OMX Group Inc. expects an increasing number of Nordic and Baltic companies to raise new equity this year as growing risk appetite among investors and low interest rates buoy markets.
“The pipeline is really, really strong” when it comes to potential initial public offerings in the Nordics and Baltics, Hans-Ole Jochumsen, Nasdaq’s head of global market services, said in an interview in Reykjavik yesterday. “And what we see this year is that the size of the IPOs are bigger.”
In 2013, 35 companies listed their shares on Nasdaq OMX’s Nordic exchanges, up from 17 in 2012, the company said. The figures include firms that listed on their junior market for growth companies, First North, and companies that opted to switch their listings to the main market, according to Nasdaq OMX Group, which operates bourses from New York to Reykjavik.
“Only last week we had a huge listing in Denmark when the cleaning company ISS went public,” Jochumsen said. “That was the largest listing in Denmark in 20 years and the largest listing in our Nordic markets in over 10 years.”
ISS A/S, a cleaning and services group with about $14 billion in revenue, raised $1.5 billion through an IPO earlier this month. Its shares then rose more than 14 percent in the first day of trading on the exchange.
Investors are being drawn to stock markets in the hope of higher returns as equities outperform other assets classes, Jochumsen said. The Nasdaq Composite Index, which includes about 2,000 U.S. and foreign listings, has gained 32 percent during the last 12 months. That compares with a 3.2 percent gain for the Bloomberg Global Investment Grade Corporate Bond Index and an 18 percent decline for gold.
“Equity markets are benefiting from the fact that interest rates are extremely low,” Jochumsen said. “If you want to put money into the bond market right now, you’ll get little return on your investment.”
Nasdaq OMX Nordic’s 753 listed companies have a combined market capitalization of 961 billion euros ($1.32 trillion), according to Nasdaq, which operates all the main Nordic exchanges apart from Oslo.
The region will probably see more companies in the biotechnology and the traditional technology sectors sell shares to the public, Jochumsen said, declining to give any names.