Nasdaq Leads Europe For SME Listings

Shanny Basar
Warsaw Stock Exchange Aims to Continue IPOs

Bjørn Sibbern, president of European markets at Nasdaq, said the exchange has listed more than 50 small and medium-size enterprises in Europe this year despite the Covid-19 pandemic.

Bjørn Sibbern, Nadsaq

Sibbern told Markets Media: “It was important to keep markets open and functionality normally during the volatility caused by Covid-19. We did not feel there was a need to shorten hours or ban short selling.”

He took on his European role in June last year after moving from New York where he had been Nasdaq’s head of the global information services business. Last year he said he wanted Nasdaq to become more visible in Europe outside the Nordics.

“We are the leading European venue for SME listings with more than 50 so far this year despite Covid-19,” he added. “The success is due to a cluster of institutional and sophisticated retail investors in the Nordics and advisers who support these initial public offerings.”

Sibbern continued that there is growing momentum as SMEs from outside the Nordics have also been listing. ‘The pipeline for the rest of this year and next year is looking good,” he added.

Nasdaq said in its third quarter results that it also led U.S. exchanges for initial public offerings during the first nine months of this year. In the third quarter Nasdaq had 144 new U.S. listings, including 105 IPOs, more than double the  41 IPOs in the third quarter of last year.

US stock markets have also experienced an increase in retail trading volumes this year and Sibbern said the Nordics had a similar trend.

“On the First North segment trading volume is 84% higher than a year ago and more than 50% has come from retail investors,”he added.

First North is an SME Growth Market as defined by the the European Union, a new subcategory introduced in the MiFID II regulations which aims to make it easier for SMEs in the region to access equity capital markets.

Sibbern said a contributing factor to increased volumes is that retail investors can trade on Nasdaq Europe and pay just for €1 a month to receive real-time data on the best bid and offer in the Nordic market.

Nasdaq reported that cash equity trading net revenues were $85m in third quarter, up $22m from the third quarter of last year. The increase primarily reflected higher U.S. and European trading volumes and a higher U.S. net capture rate according to a statement.

“We have also seen increased demand for Norwegian derivatives,” added Sibbern. “We have more than 70% share in single stock derivatives and more than 30% in index contracts.”

Adena Friedman, Nasdaq

Adena Friedman, president and chief executive of Nasdaq, said in a statement that the third quarter results highlight the strength of Nasdaq’s diversified product offerings and business model, capitalizing on opportunities presented by 2020’s capital markets backdrop, including elevated trading volumes, rising index valuations and robust IPO issuance.

Data and technology

Friedman said: “Nasdaq’s resilience and agility to adjust to the unique operating environment presented by COVID-19 is not only demonstrated in our current results, but also in the team’s continued focus on advancing Nasdaq as a technology and analytics provider, including our recently announced expansion of our regtech offerings into anti-money laundering.”

She has described Nasdaq as a technology company and when Sibbern was in New York he helped put focus on opportunities in data analytics and technology.

Last year Nasdaq completed its purchase of Sweden’s Cinnober Financial Technology, which serves brokers, exchanges and clearinghouses worldwide. When Sibbern was in New York he led the acquisitions of  Quandl, an alternative data provider based in Canada, and eVestment which provides data, content and analytics to the global institutional investment industry.

The increased demand for environmental, social and governance data is a priority for Nasdaq due to the growth in flows into ESG strategies.

In 2015 Nasdaq Nordic launched the Sustainable Bonds Market to make the segment more visible. In December last year the exchange launched the Nasdaq Sustainable Bond Network to provide data and increase transparency in green, social and sustainable bonds.

“The Sustainable Bonds Network includes data from more than 4,250 bonds from more than 70 issuers,” said Sibbern. “The platform is a global offering and includes US municipal bonds and sustainable bonds from corporates around the world.”

In May this year the exchange launched the Nasdaq ESG Footprint in partnership with Matter, a Danish fintech. The product is aimed at retail banks and analyses their customers’ portfolios against ESG metrics and the United Nations’ Sustainable Development Goals.

Nordea Bank has licensed the product which it has white-labeled “Nordea Sustainability Footprint”, in order provide independent ESG rankings data to its savings advisory clients.

Anders Langworth, head of sustainable finance at Nordea, said in a statement: “We believe the Nordea Sustainability Footprint will help our customers to better understand what sustainability means in relation to investments, so that the importance of making sustainable choices becomes more evident.”

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