Brexit 'driving UK firms to Nasdaq Nordic'

LONDON • The head of Nasdaq's European listings says the United Kingdom's decision to leave the European Union is driving more UK companies to its Nordic market.

Nasdaq Nordic now expects that up to 15 per cent of its initial public offerings (IPOs) and listings next year could be made by firms outside the region. Most of the approaches it is getting are from British companies, but there is also interest from firms in Ireland, Israel, Malta and Germany, said Mr Adam Kostyal, who is in charge of Nasdaq's European listings.

"London is going through a very uncertain period, and uncertainty is a listing's worst enemy," he said in an interview last Wednesday.

About 10 per cent to 15 per cent of Nasdaq Nordic's pipeline is filled with companies based outside Sweden, Denmark and Finland. Mr Kostyal said he is now seeing enough international interest for that level to stick.

More and more companies that had looked to the London Stock Exchange's Alternative Investment Market for smaller, growing firms are ready to "seek other options", Mr Kostyal said. That includes Nasdaq Nordic's First North offering for such firms.

Nasdaq Stockholm and the London Stock Exchange have taken turns in topping rankings as the most active market in Europe for IPOs in recent quarters. Stockholm was the busiest European exchange in the second quarter, with 34 IPOs versus London's 24, according to PwC's IPO Watch Europe report.

Nasdaq Nordic's main attraction is Stockholm's alternative marketplace, First North. It allows small firms to raise capital through an IPO without being subject to the stricter rules that apply on the main market.

The British government's decision last month to grant UK Growth Market status to First North is also helping. It was the first marketplace outside the UK and Ireland to get that status and it means British investors can get tax exemptions on investments in British companies listed on First North.

Taken together, all these developments mean that Nasdaq Nordic listings will in 2017 surpass last year's level, Mr Kostyal said. There is "every potential" for a new record to be set, he added.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on September 12, 2017, with the headline 'Brexit 'driving UK firms to Nasdaq Nordic''. Print Edition | Subscribe