Bloomberg News

Nasdaq in Finland Implores Companies to List in IPO Drought

February 03, 2012

(Updates with investor comment in 10th paragraph.)

Feb. 2 (Bloomberg) -- Nasdaq OMX Helsinki Oy, home to Nokia Oyj, is pleading with companies to list their shares on Finland’s main exchange and end a drought in initial public offerings that threatens to send equity investors elsewhere.

“Investors are crying out for more companies to list” in Finland, Lauri Rosendahl, the president of the exchange, a unit of Nasdaq OMX Group Inc., said in an interview at the bourse on Jan. 31. “There is a capital market out there that is willing to invest in good companies.”

Last year, there were “zip, zero” new companies selling shares on the Helsinki exchange and only one spinoff in 2010, in which a firm listed a part of its business separately, Rosendahl said. That compares with a total of 53 entrants during the information technology boom of 1999 and 2000. In neighboring Stockholm, there were 29 IPOs last year.

The European debt crisis “has definitely hurt listings” both in Europe and the U.S., Rosendahl said. The benchmark Stoxx Europe 600 Index slid 11 percent last year, while the Nasdaq OMX Helsinki all-share index plunged 30 percent. Both indexes have risen this year.

Rosendahl said companies are reluctant to list in part because of a perception that such a move brings with it stricter regulatory requirements and increased costs. Also, “there’s a little bit of a culture where companies are used to growing based on the cash flow they can produce themselves,” he said.

The latest listings in Helsinki include Finnish bank Aktia Oyj in Sept. 2009, and builder SRV Oyj, which sold shares in 2007 to help fund expansion into Russia. Paint maker Tikkurila Oyj was spun off from chemicals producer Kemira Oyj in 2010.

Angry Birds

Rovio Entertainment Ltd., the creator of the Angry Birds games and a poster child for Finnish startups, has mentioned New York and Hong Kong as possible venues for a future listing.

“Of course I would love to get Rovio on the exchange,” said Rosendahl, a former telecommunications analyst for Carnegie Investment Bank AB and Deutsche Bank AG. “Nasdaq OMX can offer any company a dual listing in the U.S. or even a triple listing opportunity.”

The exchange accounts for more than half the volume of shares in Nokia, whose American Depositary Receipts are also listed in New York, Rosendahl said. Finland’s 130-security all- share list includes nine companies with a market value of more than 5 billion euros ($6.6 billion), two of which are Swedish dual listings. Average volume over the last 10 years has been about 58 million shares a day.

‘Really Interested’

“I would be very happy to see new IPOs on the Helsinki exchange this year,” said Timo Ritakallio, deputy Chief Executive Officer of Ilmarinen Mutual Pension Insurance, by e- mail. He helps manage 27.1 billion euros of investments. “As an institutional investor, we are really interested” in new opportunities in Finland, Ritakallio said.

About 20 to 30 companies in Finland “are breaking into the range where they could justify a public offering,” said Will Cardwell, head of the Aalto University Center for Entrepreneurship.

“We have more discussions than we have had for many years” with potential IPO candidates, Rosendahl said. “We started two and a half years ago with a list of 75 companies that could be on our main market over the next three to five years. We’ve done a lot of legwork discussing the pitch story even with smaller companies.” He declined to say whether there could be IPOs this year.

--Editors: Kati Pohjanpalo, Tasneem Brogger

To contact the reporter on this story: Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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