Nasdaq's Henrik Husman: Challenges and opportunities in Finland’s IPO market
At the AfterWork event titled "Listing: What Does It Mean from the Perspective of the Company’s Board and Management?" At the IR Partners office on December 12, 2024, Henrik Husman, President of Nasdaq Helsinki, shared his views on Finland’s IPO market. While acknowledging the challenges the market has faced, he expressed optimism about its future potential.
Husman began by reflecting on the limited listing activity in Finland. The country typically sees about five to ten IPOs per year, but recent years have been quieter. In 2024, notable exceptions included SolarFoods and Kalmar, but the overall pace of new listings remained slow.
Henrik Husman noted that rising interest rates have significantly impacted Finland's IPO activity by lowering company valuations and complicating the decision to go public. Additionally, these higher rates have reduced household purchasing power, leading to decreased consumer spending and further dampening economic growth. Geopolitical uncertainties have also made investors more cautious, affecting company revenues and profits, which in turn puts additional pressure on valuations.
Beyond these external factors, Husman highlighted structural challenges within Finland’s capital markets. The country, quite like all EU member states, relies heavily on bank financing rather than equity markets, which limits the flow of capital into IPOs. Large companies often have significant state ownership, and Finnish households have relatively low levels of wealth, further constraining domestic investment in new listings. Furthermore, domestic share ownership is concentrated among a few large institutional investors, while the medium-sized investor base is quite small. Husman also noted a lack of aggressive growth ambition among many businesses, which has contributed to the slower pace of IPO activity.
Despite these difficulties, Husman shared reasons for optimism. He introduced the Nasdaq IPO Pulse Index, a new tool that predicts IPO activity six months ahead. Recent data from the index suggests a rebound may be on the horizon.
Husman highlighted the significant progress Finland has made in developing a well-established and supportive IPO ecosystem especially over the past decade. Today, the country benefits from a network of experienced advisors and a growing portfolio of successful case studies from companies that have successfully undertaken the listing process. These advancements provide invaluable expertise and guidance for businesses considering going public, marking a remarkable transformation compared to the landscape a decade ago.
Husman emphasized that while Finland faces structural and economic barriers, the country is well-equipped for improvement in the IPO market. He encouraged company leaders to explore the opportunities equity markets can provide, particularly as market conditions begin to show signs of recovery.
The message was clear: Finland has the tools and potential for a brighter IPO future. Husman closed his speech with optimism, highlighting Finland's strong foundation and potential for a vibrant IPO future.
