Swedbank: Tallinn stock exchange likely to exceed 80,000 investor threshold
The Tallinn stock exchange has shown rapid growth this year, which ranks among the fastest seen on markets globally, and the threshold of 80,000 investors is likely to have been exceeded with the investors added with the IPO of Enefit Green, Andres Suimets of Swedbank Markets said on Wednesday.
"The public offering of shares in the renewable energy company Enefit Green ended with the highest ever number of participants, speaking of the Baltic markets. A total of 60,335 investors subscribed. There are few examples in the world where the shares of a company going public are subscribed by nearly 5 percent of the total population of a country," Suimets wrote on Swedbank's blog.
He said the result was even more exceptional, showing Estonia's growing investment culture, since as recently as four years ago there were just about 20,000 securities accounts in Estonia which held some securities of the Tallinn stock exchange, among other securities. Since then, the number of securities accounts has increased rapidly every year.
Suimets observed that in addition to the large number of new Enefit Green shareholders, the company has probably also set a milestone by distributing 55 percent of all shares to retail investors. As far as is known, this is the largest share of retail investors in the history of floats by similar companies.
"For example, when Altia, Finland's best-known alcohol company, was floated, this proportion was 26 percent. Other companies previously owned by the state include Saudi Aramco, Saudi Arabia's oil and natural gas company that staged the world's largest IPO, and UK postal operator Royal Mail Group, both of which have stood out with a 33 percent share of small investors," Suimets said, adding that in the IPO of the French state-held lottery operator the FDJ the ratio was as high as 39 percent.
Suimets finds that Enefit Green has struck a good balance, because considering the financial volume of the IPO and the number of participants, eight out of ten investors managed to get the full amount of shares they desired. Given the large oversubscription, this ratio indicates the issuer's strong preference of the local investor.
According to Suimets, a new surge in development has been long expected on the Tallinn stock exchange. Somewhat surprisingly, however, it has not happened as a result of the long-awaited return of foreign investors, but of a rapid increase in the number and activity of local investors.
"Where in previous years the number of transactions on the Tallinn stock exchange was limited to 50,000, this year, for the first time in the 25-year history of our own exchange, more than half a million transactions are made. Against this backdrop, we are rapidly approaching another record, because exceeding the historical threshold of 100,000 investors is only a matter of time if we look at today's trend," he said.
"For local investors, a company of significant size with strong growth ambition was added to the home market. Enefit Green is an excellent addition to the local capital market and the next stage of development for the Tallinn stock exchange and the Estonian investment community can begin," Suimets added.
State-owned energy generator Eesti Energia's renewable energy subsidiary Enefit Green announced on September 23 that it would list on the Nasdaq Tallinn Stock Exchange. The initial public offering (IPO) was oversubscribed fourfold following flotation.
Over 60,000 retail investors subscribed, with over 80 percent obtaining the full subscription applied for, BNS reports, while the base rate is €2.90 per share.
Across Estonia, Finland, Latvia, Lithuania and Poland, Enefit Green owns 22 wind parks, 38 solar parks, four cogeneration plants, a pellet plant and a hydro power plant. The total capacity of Enefit Green's portfolio is 457 MWe. In 2020, Enefit Green produced 1.35 TWh of electricity.
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Editor: Kristjan Kallaste