Sweden’s junior market became Europe’s hottest market to raise funds for growth companies in the first half of the year as retail investors took advantage of favourable tax policies to snap up the index’s tech and healthcare stocks.
Companies on Nasdaq’s First North Growth Market, based in Stockholm, have raised £1.6bn to date this year, compared with £1.5bn on London’s Aim, the traditional market leader, according to Dealogic data*.
Retail investors’ participation in global equity markets has slowed this year as the war in Ukraine, a global economic slowdown and rising energy and food costs dampen investors’ appetite for taking punts on the small and often lossmaking companies.
But they have kept faith in First North companies, including Embracer, Europe’s largest gaming group and the most actively traded name on the index, and a series of tech and healthcare companies.
The total raised is a considerable swing from last year, when companies raised more than £9.5bn on Aim, almost double the £5.4bn raised on First North. While retail investors have stepped back from Aim, they accounted for half of all flow into small-cap listed companies in Sweden in July, Nasdaq figures show.
“The Nordic market seems to have weathered the tribulations of the past few years better than the rest of Europe,” said Thomas Thygesen, head of strategy at Swedish investment bank SEB. “The investor base is more confident and has more capital available for risk.”
Tax policies encourage Swedes to invest in stocks, including investment products that do not require investors to pay capital gains taxes on transactions. This has meant that the proportion of the market made up by retail investors tends to be higher than on rival markets, although Aim also offers tax breaks on capital gains.
Retail traders represented between 31 and 52 per cent of trading in the 10 days after Volvo Cars’ listing on the main exchange in 2021, according to data from Nasdaq.
Nasdaq said the ready supply of retail investment was encouraging companies to raise money on the First North index. “London has such a huge capital market and it’s competing with Stockholm. Something’s got to be setting us apart: that something is retail participation.”
In contrast, Christopher Raggett, co-head of corporate finance at FinnCap, a stockbroker for Aim companies, said: “One thing driving the bubble of the pandemic was the amount of retail capital waiting to be deployed . . . people aren’t trading in as lively a fashion as previously.”
But First North, like others, has not been totally immune to the declines in global equities markets.
The index has seen capital raising fall by more than half in 2022 and its main index is down by more than 30 per cent this year. The Aim index has fallen more than 24 per cent so far this year.
“It’s a tricky year for markets generally,” said Raggett. “The amount of capital raised on Aim fell off a cliff from September last year to January this year.”
Despite capital raising on First North surpassing that of Aim, “people who are in the market in the Nordics, who don’t compare with anyone else, are finding this is a horrible year”, said SEB’s Thygesen.
*This article has been amended since original publication to clarify that the source of the data was Dealogic
Sweden’s junior market becomes Europe’s hottest for growth stocks & Latest News Update
Sweden’s junior market becomes Europe’s hottest for growth stocks & More Live News
All this news that I have made and shared for you people, you will like it very much and in it we keep bringing topics for you people like every time so that you keep getting news information like trending topics and you It is our goal to be able to get
all kinds of news without going through us so that we can reach you the latest and best news for free so that you can move ahead further by getting the information of that news together with you. Later on, we will continue
to give information about more today world news update types of latest news through posts on our website so that you always keep moving forward in that news and whatever kind of information will be there, it will definitely be conveyed to you people.
Sweden’s junior market becomes Europe’s hottest for growth stocks & More News Today
All this news that I have brought up to you or will be the most different and best news that you people are not going to get anywhere, along with the information Trending News, Breaking News, Health News, Science News, Sports News, Entertainment News, Technology News, Business News, World News of this made available to all of you so that you are always connected with the news, stay ahead in the matter and keep getting today news all types of news for free till today so that you can get the news by getting it. Always take two steps forward
Credit Goes To News Website – This Original Content Owner News Website . This Is Not My Content So If You Want To Read Original Content You Can Follow Below Links