Nordic Bourses That Have Dethroned London Pile On Post-Brexit

  • Nasdaq Nordic has posted the most listings in Europe in 1H
  • President concerned by possible cuts in U.K. corporate tax

The pan-Nordic market place that has already dethroned London as Europe’s most attractive stock exchange is ready to scale up its efforts to steal business from the U.K. following the country’s vote to leave the European Union.

In June it bagged Europe’s biggest initial public offering so far this year, that of Danish utility Dong Energy. Nasdaq Nordic is today in bullish mode as it jostles for position with other capitals as the continent’s prime operator.

"It’s possible that London’s financial market becomes fragmented," said President Lauri Rosendahl, whose company operates stock exchanges in Sweden, Denmark, Finland, Iceland and the Baltics.

"There are of course other players like Paris, Frankfurt and Dublin that will do their best to get a piece of the pie. But I definitely think that Stockholm has a role to play in that game,” he said of the city that hosts the Nordics’ largest market place.

According to Rosendahl, most new stock exchange listings have "come to a dramatic halt." But the Nordics are "steaming ahead, both when it comes to the number of companies and new capital that the companies have accessed.”

According to a report by PwC, Nasdaq Nordic attracted more companies and raised more capital than any other exchange in Europe in the first half of this year. A total of 47 companies listed on the exchange and raised 4.2 billion euros ($4.7 billion), compared with London’s 39 companies and 3.5 billion euros over the same period.

To be sure, Dong’s 2.3 billion-euro listing has helped boost those numbers (another Danish company, payment firm Nets, is set to add to that with an IPO in Copenhagen worth a potential $824 million).

But Rosendahl says that Stockholm’s equivalent of London’s Alternative Investment Market for smaller companies is particularly alluring, especially if London loses its EU passporting rights.

"We have a nice market for small companies that are growing to list and access capital,” he said. “We can definitely work on making that more international.”

Owned by Nasdaq Inc. since 2007, Nasdaq Nordic already has staff in London prepped to entice more companies. According to Rosendahl, their sales pitch includes a propensity by private investors in Sweden to bet on smaller companies that big investors tend to overlook.

Rosendahl predicts a repeat of last year, when a record 97 companies listed on Nasdaq Nordic. Forecasts for 2017 suggest another 100 or so will seek to join.

One of the biggest threats from London revolves around discussions in the U.K. to cut its corporate tax. Some British lawmakers have suggested reducing it from the current 20 percent to 15 percent, while others have suggested scrapping it altogether.

With Sweden’s corporate tax rate at 22 percent, its prime minister recently warned that the U.K. should be careful about cutting taxes aggressively ahead of its Brexit negotiations.

The corporate tax level must be a part of any Brexit negotiations “and part of a commitment that should be in place for many years after you strike a deal,” Rosendahl said.

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