(For other news from the Reuters Nordic Investment Summit,
* Finnish IPOs lagging behind Nordic peers
* Bourse chief sees bank regulation encouraging change
* Says Nokia's handset exit could hurt interest in exchange
(Adds comments on Nokia and Finnish taxes, details on listings)
By Jussi Rosendahl
HELSINKI, Oct 2 Companies are once more seeking
to list on Helsinki's stock exchange after a dearth of initial
public offerings (IPOs) in recent years, as new banking
regulations make it harder for them to borrow funds, the
president of Nasdaq OMX Helsinki said.
Once a hot-bed of technology listings, the last
fully-fledged IPO on Helsinki's main list was in 2007 amid a
sluggish economy and a lack of new growth industries. Most
recent offerings have come from spin-offs or dual-listings.
IPOs can give companies more capital for expansion and are
considered a measure of an economy's growth potential.
Low capital volumes and several delistings, including the
recently bankrupt Tiimari, have meant the Helsinki
exchange has lagged bourses in neighbouring Nordic nations and
raised doubts over Finland's reputation as an innovative
The Finnish bourse has added 12 new names to its main list
since 2007, compared with 41 in Stockholm and 30 in Copenhagen.
Nasdaq OMX's market for smaller companies, First North, has also
failed to attract Finnish growth companies: it currently has 5
companies from Finland, 144 from Sweden and 28 from Denmark.
"It is true that following the financial crisis we had a
very long dry season on the Helsinki Stock Exchange in terms of
new listings," exchange president Lauri Rosendahl told the
Reuters Nordic Investment Summit on Wednesday.
"However, during the last 12 to 18 months that has turned
around, and in a very positive way."
He noted the planned listings of restaurant firm Restamax
and real estate trust Orava, and said the bourse was in talks
with other companies contemplating IPOs, both on the main stock
exchange and First North. ,
He declined to say how many companies were involved.
"The outlook is pretty okay," he said. "If the conditions
are favourable, I think we will have more companies."
Rosendahl, who is also in charge of Nasdaq OMX's equity and
derivatives trading for the entire Nordic region, said the
exchange would benefit from Basel III global financial rules.
Many banks are restricting lending as they work towards the
regulations that compel them to hold far more capital relative
to their loans than they did before the 2007-09 financial
crisis. The rules, which will be phased in between now and 2019,
can be met by reducing lending, raising more capital or both.
"Banks will not be able to finance companies the way they
used to," Rosendahl said. "In Finland this change is
particularly big because we have the most bank-centred debt
capital market in Europe."
Finland is one of the few triple-A rated economies in the
euro zone, but fell into recession earlier this year as its
exports have been hit by Europe's prolonged economic downturn.
In addition to a lack of listings, the Helsinki bourse has
also seen low trading volumes.
The Helsinki exchange's turnover fell to 98.7 billion euros
($133.5 billion) last year, around 75 percent lower than in
2007, although Rosendahl said that was a Europe-wide trend,
He said the sale of Nokia's handset business to
Microsoft could lead to a further drop in investors'
interest in the bourse. In its heyday, the one-time mobile phone
leader helped to attract global investors to the Finnish market.
"The impact (of Nokia's deal) will be big of course, because
it has been the flagship company," said Rosendahl, who
previously followed the handset maker as a technology analyst.
"But as you know, (Nokia) has been having its difficulties
for a number of years ... so the risk ... in terms of trading
volumes and share price development and so forth, that has
practically already materialised."
Another problem for the Finnish market has been the low
level of investment capital, and Rosendahl said this was partly
due to high taxes which discourage households from investing.
Finnish households held a total of 80 billion euros in bank
accounts as of the end of 2012.
Rosendahl said the government should cut taxes on listed
companies' dividend payments, which are currently higher than
those paid out by private firms. The status quo is also seen as
an obstacle for companies' IPO plans.
"You don't find that kind of structural difference anywhere
else," Rosendahl said of the tax, which he called an "odd old
"We will definitely need all the capital we have in this
country to be in the most efficient use, so to say. Households
are traditionally very defensive in their savings approach in
Finland relative to most other countries."
In another effort to boost activity, the bourse is looking
to establish a market where small and medium-sized companies
would be able to issue debt on a public market, Rosendahl said.
($1 = 0.7393 euros)
Follow Reuters Summits on Twitter @Reuters_Summits
(Additional reporting by Terhi Kinnunen; Editing by Ritsuko
Ando, Pravin Char and Mark Potter)