New Nasdaq CEO: Bring state companies and bonds to the stock exchange
Kaarel Ots, who took over as manager of Nasdaq Tallinn a week ago, said on Tuesday that it looked like things were finally beginning to move listing stocks and bonds of Estonian state-owned companies on the securities market.
“The stock market needs businesses, including state-owned ones, there's been talk about this for years,” Ots told Eesti Päevaleht in an interview. “Holdings in state companies and state bonds are a mantra I'm not going to give up. While it’s a basic thing that large companies are listed, you can’t force anybody to list. I intend to work a lot with medium-sized and small companies to get them on the alternative market or the bond market.”
Ots said that though investors were considerably better educated about the stock market now than they were a few years back, the exchange still suffered from the fact that to too many smaller companies, it still seemed a place where there was nothing to do.
“I’d like to change that attitude. There are no quick and easy victories. You have to be consistent. While I do believe that educating the investor is on a significantly better level now than years ago, we cannot say that all has been done,” he added.
What kept investors away from the stock exchange was the small choice they faced. "What the investor needs is businesses. Now the turnover is low, the choice is narrow,” Ots said. One option, according to him, would be state bonds, which would help establish the notion of a risk free rate in Estonia.
“State bonds are a long-term, stable, and safe investment instrument, alongside bank deposits. On the occasion of the 100th anniversary of the Republic of Estonia, we could issue a 100-year bond,” Ots said.
Second and third pillar pension funds should also invest more in Estonian bonds. “The arrival of state companies on the stock market would set things moving in that direction,” Ots added.