Nordic IPO Cash Testing Dot-Com Boom Has Nasdaq Seeing More

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Nordic companies have raised more capital this year through initial public offerings than at any time since the Internet boom back in 2000.

“Both on our main market and our growth market we’ve seen huge activity in the number of IPOs,” Adam Kostyal, head of European listings at Nasdaq OMX Group Inc., said in a phone interview. “We have a good quarter in front of us.”

Central bank stimulus is aiding a recovery across much of the globe that’s underpinning investor demand, Kostyal said. As monetary policy keeps bond yields low, more cash is being channeled into stocks as buyers scour markets for the best returns.

Companies in Sweden, Finland, Denmark and Iceland have raised about $5 billion in 40 IPOs this year, topping the 3.2 billion euros ($4.1 billion) raised in 2006. ISS A/S raised more than 8 billion kroner ($1.4 billion) in March and Com Hem Holding AB brought in 5.67 billion kronor ($793 million) in June. In 2000, IPOs generated a record 11.5 billion euros, mostly from Swedish phone operator TeliaSonera AB, after the government sold 30 percent of its stake for 76.6 billion kronor.

Market Disruptions

There are signs some recent public offerings may have been overpriced. Market disruptions caused by geopolitical strife in Ukraine and the Middle East as well as weak German data have prompted some investors to recoil, leading a few firms to delay or even cancel IPOs.

Rocket Internet AG and online retailer Zalando SE disappointed investors this month after IPOs that were over-subscribed. Both companies sold shares in Germany in the same week; both are now more than 8 percent lower than the IPO price.

Nordic Capital, a Stockholm-based private-equity firm, is considering an IPO of car rooftop accessories maker Thule Group, while EQT Partners AB is said to be preparing Scandic Hotels AB for a Stockholm listing.

With more volatility in European and global markets, Kostyal said it’s wise for companies not to overshoot on valuations and for investors to show patience before jumping in. Stockholm’s benchmark OMX 30 index has tumbled 10 percent since reaching a 14-year high in September, echoing a broader selloff in equity markets around the world.

“Let’s not be too hasty in judging their performance,” Kostyal said. “We’ve had a good success rate with all the main markets if you look at the listings we’ve had.”