Nordic Exchange Shares Revenues
The Nordic Growth Market, an exchange operating in Sweden, Norway and Finland, said it has become the first to share revenues with its listed companies in order to boost trading volumes.
Since July 1, companies listed on NGM have received 25% of revenues generated when their shares are traded on the exchange.
Roger Peleback, chief executive at NGM, told Markets Media: “NGM has a mixture of micro to small-cap companies who do not have the money to work on their listing with an investor relations department or to develop their website. Most exchange initiatives have targetted market makers but we are helping companies understand how to make their stocks more liquid.”
Peleback said the most liquid NGM listed companies could receive €100,000 per month but even the smallest companies could use the revenues to lower their listing fees of between €1000 and €2000 per month.
“Banks have cut down on their research so it is difficult for smaller companies to gain visibility,” he added.
Ulrik Jansson, president and chief executive of utility Crown Energy, said in a statement : “I’m grateful towards this opportunity to lower the cost of our listing. It is also an incentive for the company to market ourselves and, by doing so, immediately seeing the result of this in higher turnover and thus lower costs for the listing.”
NGM was founded in 1999 and is a wholly-owned subsidiary of Börse Stuttgart, the German retail exchange. The Nordic firm also operates the Nordic Derivatives Exchange, a market for listing and trading structured products, bonds and exchange-traded funds.
In May NGM listed equities had a total turnover of 104m Swedish Krona ($15.2m), 11% higher than a year ago. NGM reported that in the first five months of this year total turnover for listed equities increased by 57% over the same period in 2013.
Total turnover for the exchange, including derivatives, in May was SEK 4.7bn SEK ($687m) in Sweden, Finland and Norway.
Tommy Fransson, vice president of NGM, said in a statement: “We have worked hard to build up the NDX-segment with the vision to offer a trading system that is cutting edge and adapted to our customers’ needs. We continue to increase our market share and have about 88% of the market in Sweden, compared to 78% in 2013.”
Peleback said there is a strong pipeline of companies waiting to go public on NGM and there could be a boom of listings in Sweden next year.
“NGM used to dominated by a technology companies but now has a mixture of sectors,” added Peleback. “Many Swedish tech companies listed on Nasdaq OMX in the US but we are hoping that more will now be interested in staying in their domestic market.”
The priority should be to ensure continuity of cross-border services and avoid market fragmentation.
Nearly a dozen retail brokers have joined to evaluate how market infrastructure and rules should evolve.
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