Why Stockholm’s Stock Exchange is Thriving: Insights from EU Officials

Officials from Brussels recently visited Stockholm to learn more about the thriving stock exchange there, as it is outperforming other European countries. The Nasdaq Stockholm stock exchange has seen high demand, and the Financial Times reports that EU officials went on a study trip to understand why this is the case.

During the trip, the management of the Stockholm Stock Exchange presented the local capital market ecosystem and how many small and medium-sized companies have chosen to list on the exchange. This is in contrast to other European countries, including London, which are experiencing low IPOs and declining trading activity.

Sweden’s active capital market has attracted attention, with many foreign companies eager to list in Stockholm. The country has implemented incentives that have resulted in over 500 companies being listed on the Stockholm Stock Exchange in the past eleven years, surpassing countries like France, Germany, Holland, and Spain combined.

In comparison, Helsinki has seen only a few IPOs in recent years, highlighting the difference in vibrancy between Sweden and Finland’s stock markets. Swedish pension funds have played a significant role in listing activities, emphasizing domestic shares and contributing to the success of the stock market ecosystem.

Unlike Sweden, domestic investments by pension funds have decreased in countries like Britain and Finland partly due to slow price development of domestic shares. Efforts are being made in Europe to stimulate stock markets through regulatory changes and encourage investments in domestic stocks following Sweden’s successful model. Overall, the study trip highlighted the importance of a thriving stock market ecosystem and how incentives can promote market activity and attract companies to list on exchanges.