Is there a IPO turnaround on the horizon?
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Henrik Husman, CEO of Nasdaq Helsinki, spoke at an IPO-themed after-work event organised by IR Partners in early December about the state of the IPO market and what to expect in the coming year. We’ve compiled a few highlights from his remarks in this blog post.
Not a single actual IPO has taken place this year. If we include technical listings, partial spin-offs, and transfers to other exchanges, the number of listings for the year rises to five.
It has been quiet on the IPO front recently, not only in Finland and the other Nordic countries, but also more broadly in Europe and the United States. The change feels enormous, especially when compared to the record year three years ago, although that may not be the best point of comparison. The outlook, however, is positive, and a clear uptick has already been seen in December, particularly in Stockholm.
The Stockholm IPO Pulse Index is on the rise
The positive turnaround is also indicated by the Stockholm IPO Pulse Index launched by Nasdaq, which aims to forecast upcoming IPOs in Sweden over a time horizon of at least six months. The index is based on a study that identified the six most influential factors out of fifty parameters that have historically predicted IPO trends.
When the index is rising, the number of IPOs is expected to grow within six months, and right now, the index is indeed on the rise in both Finland and the United States.
In addition to the index, another sign of positive development is that there are clearly more IPO due diligence reports being conducted than a year ago. Of course, a company commissioning such a report isn’t necessarily planning to go public right away, but at least it’s being considered as one possibility.
Maintaining the stock market’s vitality is important
What about delistings? This year, it appears that five companies will be delisted from Nasdaq Helsinki. This may seem like a lot given the lack of IPO activity, but the figure actually corresponds to the average number of annual delistings. So there is no rush to exit the stock exchange.
The vitality of the stock exchange is mentioned as one of the goals of the government program. The Ministry of Finance has indeed assembled a working group on the growth strategy for the financial sector to advance this issue. So far, the working group has focused on creating a shared understanding of the situation, and the plan is to explore solutions in the coming months.
There is therefore no need to worry about IPO trends. It is also worth noting that compared to the situation ten years ago, we have a highly functional ecosystem – meaning highly skilled professionals for all the matters a company going public needs, as well as those required for operating as a listed company.
Are you planning to go public? Get in touch – we’ll be your experienced partner! We know the process’s opportunities and pitfalls, and we’ll help you reach the finish line even in unexpected situations.
Kare Laukkanen
Business Director, IR and Financial Communications, Partner
+358 50 553 9535 kare.laukkanen@irpartners.fi