Brussels officials recently took a study trip to Stockholm to learn more about the successful stock exchange in Sweden. While companies like Ericsson and Nokia are leading the operator race in the USA, Sweden’s government debt ratio is much lower than Finland’s. The Financial Times reported that EU officials visited Stockholm a year ago to understand why the Nasdaq Stockholm stock exchange is in high demand.
During the visit, the management of the Stockholm Stock Exchange highlighted the local capital market ecosystem, showcasing why many small and medium-sized companies choose to list on the exchange. This is in contrast to other European countries, such as London, where IPOs are low and trading activity is declining.
According to William Wright, founder of the think tank New Financial, Sweden has the most active capital market in Europe. The country has implemented incentives to attract companies to list in Stockholm, resulting in more IPOs than in France, Germany, Holland, and Spain combined. Helsinki, in comparison, has seen fewer IPOs in recent years.
Swedish pension funds have played a significant role in the success of the stock market, focusing on domestic investments. In contrast, pension funds in the UK and Finland have reduced their holdings in domestic shares. The Financial Times noted that Sweden’s approach to stimulating the stock market has been more successful compared to other European countries.
It is clear that Sweden’s proactive measures to encourage listing and domestic investment have paid off, making it a model for other European countries to follow in reviving their capital markets.