President of OMX Nordic Marketplaces expects common list to attract new investors

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By Kari Räisänen
     
      Jukka Ruuska, President of OMX Nordic Marketplaces, has been advocating the establishment of a common Nordic stock exchange list for two years already. Now he is making a promise.
      "The new Nordic list will improve our visibility in the world, attract more investors here, and will certainly improve the bourse’s liquidity", he says calmly.
     
"Liquidity" is a word that is often repeated by Ruuska. The Nordic list that he so keenly advocates, depicts the volume and velocity of trading.
      Liquidity is important for investors: when trading is heavy, the value of shares is not affected to an unreasonable degree by individual purchases, and shares can also be sold easily.
      For Ruuska’s employer, OMX, liquidity is nothing less than a precondition for existence, as the stock exchange takes a share of every transaction.
     
Ruuska’s promise will soon be put to the test. The Nordic list that he has been promoting is being presented for the first time today, and from now on, the stock exchange will publish the lists of the bourses of Helsinki, Stockholm, and Copenhagen. Companies will no longer be divided according to their fields of business, but rather according to market value - as large medium-sized, and small.
      Ruuska’s hopes for a shining future for the Nordic stock market could soon be a reality, considering the even bigger upheavals that have taken place in recent years. First the Helsinki Stock Exchange bought the exchanges of the Estonian capital Tallinn and the Latvian capital Riga, and soon after that, the OM company, which has run the Stockholm Stock Exchange bought the Helsinki Stock Exchange.
      The result is OMS, which has taken over the stock exchanges of Copenhagen, Reykjavik, and the Lithuanian capital Vilnius. And now, Ruuska is talking enthusiastically about a common Nordic stock market.
     
The change can be seen on the pages of Helsingin Sanomat, which will be publishing a Nordic 40 list, comprising the forty Nordic countries with the highest market value. Included are nine companies from the Helsinki Stock Exchange, five from Copenhagen, and 26 from Stockholm.
      "The Nordic 40 is a concrete example of our new home market. That is where the snowball effect begins. Finnish investors will soon become interested in Swedish listed companies and will start digging for news and analysis about them", Ruuska predicts.
      He says that OMX once commissioned a study by the Helsinki School of Economics on the possible effects of a common Nordic list. The material was based partly on the experiences of Euronext - the result of the linkage of the stock exchanges of Paris, Brussels, and Amsterdam.
      The final result was that the larger the marketplace, the more it attracts investors", Ruuska says.
     
Not everyone is convinced that the development is a good thing. For instance, Hannes Helenius, who is responsible for stock trading matters at Sampo Bank, sees the changes to be first and foremost a marketing campaign for the listed company OMX itself, with no relevance for professionals.
      In Finland, small listed companies are worried that they will be lost in the mass of lengthy lists, and that investors will become less interested in them.
     
There was some confirmation to those fears on Friday when a study by the communications company Hill and Knowlton was released. According to the study, the majority of professionals in the investment business felt that the Nordic list would primarily benefit large companies.
      "I understand the concerns of small companies, but the status quo is also not good. In my way of thinking, the only solution is to build a larger home market and to get more investors that way", Ruuska says.
     
Already now there is very little trade in shares of small listed companies, and the number has declined.
      Ruuska may have some kind of a solution to the latter problem already at the beginning of next year. "The stock exchange plans to publish analyses of an independent expert", he says.
      Many investors have also pointed out to Ruuska that it is premature to become too excited about a Nordic home market, considering that only the bourses of Helsinki, Stockholm and Copenhagen are on the same list so far.
      To top it all off, all three trade in different currencies.
      Ruuska concedes that it will be difficult to persuade Oslo to take part in the cooperation; Norway’s oil and energy companies are doing well, which is also reflected in the Oslo Stock Exchange. Last year 47 new companies were listed there.
      Nevertheless, Ruuska’s faith is unshakable.
      "Lets’ think about the corporate sectors of Finland and Sweden. Nowhere else in the world has integration been brought as far. I am quite certain that the stock exchange will go the same way - Finnish investors will become Nordic investors.
     
Helsingin Sanomat / First published in print 2.10.2006

More on this subject:
 Profile: Jukka Ruuska

Previously in HS International Edition:
  OMX list links Finnish, Swedish, and Danish stock exchanges (3.10.2006)

Links:
  OMX website

KARI RÄISÄNEN / Helsingin Sanomat
kari.raisanen@hs.fi