A SUPPLEMENT TO EUROMONEY/MARCH 1998: NORDIC CAPITAL MARKETS
To bankers from outside the region, the Nordic block (comprising Denmark, Finland, Iceland, Norway and Sweden) has long seemed to present two faces. It is sassy and sophisticated when raising capital in the international markets but soporifically parochial at home. It is far ahead of the rest of continental Europe in its willingness to embrace new structures like tier-one capital and mortgage-backed bonds, yet it still clutches on to an archaic system of A and B class shares which give one shareholder 100 times more voting power than another.
Over the past four years, however, the gap between its local and its international faces has begun to close. Local equity exchanges are booming thanks to a flood of money from UK and US investors and a spate of hi-tech IPOs. Bond-market trading has risen by over 100% in the past two years. At the same time, the convergence of the Swedish krona and the Danish krone with the Deutschmark has made Eurobonds denominated in those currencies extremely attractive to retail investors in continental Europe. Foreign ownership of Nordic assets is now running at around 40%, higher than for virtually any other region in the world.