Investment director Harvard Nysheim criticizes Borsen’s handling of the growth market at Euronext. He believes that short-term profits take precedence over market confidence.
– It’s good if someone wants to tackle this, Nesheim tells E24.
– Oslo Burs, I don’t feel he did a good job. They seem only interested in the number of listings they receive.
He is the former head of research at Handelsbanken, and today the investment director at Conceptor Invest.
On Thursday, Finanstilsynet presented the results of audits of the Oslo Stock Exchange, brokerages and auditors regarding a wave of listings on the easily regulated Euronext Growth Market.
The Oslo Stock Exchange was met with several critical remarks and asked to “take action” to ensure that “listing conditions are met”. Oslo Borz responded that work on the measures is already underway.
Critic of the Oslo Stock Exchange
They accept many companies that do not already meet the listing requirements. They are too young, lack history, and cannot be appreciated as one should have a sufficient basis for it.
There are no audited accounts, no PowerPoint and letters of intent. No one can evaluate based on that.
The requirements for listing on Euronext Growth are not as stringent as on the Oslo Stock Exchange, and the market has attracted many early stage growth companies.
Damaged Growth Stock Acquisition Funds Circle: – Everything must be in place for the first acquisitions
Nesheim stresses that there are also some good companies among the new entrants in the market, but in other cases it is about “making a get-rich-quick deal”.
The problem is that they have become too interested in short-term profits, rather than maintaining the confidence they should have in the market, says Nisheim on the Oslo Stock Exchange.
It is believed that there are many conflicts of interest.
– For example, the Oslo Stock Exchange must ensure that companies meet the requirements. In addition, they earn money from being included in the list.
– Brokers should also help ensure that the information is sufficient and good quality, at the same time that we know what they are making money from. There are only such issues here really.
Stock exchange director Oyvind Amundsen has received criticism from Nysheim.
I am already aware that Harvard Neshem is generally critical of Euronext’s growth. At the same time, both Norwegian and European (EU) authorities want such markets so that young companies also have access to risk capital, and thus are able to contribute to job creation and participate in overall value creation, he answers.
Finanstilsynet also did not disclose any critical errors, licensing errors or deficiencies during the Euronext Growth audit, and therefore I do not understand the claims from Nesheim.
It is not permissible to leave black money
In the last year alone, 68 new companies were listed on the Oslo Stock Market, which is a record number. This contributed to 2021 being a year of record profits on the Oslo Stock Exchange.
At the same time, the listing wave has led to a gold rush to brokerage houses that help companies with listings and raising capital.
Euronext Growth has also attracted thousands of small savers, but the returns of many new companies have taken a hit.
– This is a game, where someone has been with her long enough and realizes that it is a game in many ways. Where everyone benefits from success, Nissheim says, in the end it is important not to leave black money.
– Those who will come in good faith and will be part of this, because it is green and gentle – that is the sad thing.
Finanstilsynet after the listing wave: – Oslo Bors must take more action
Previously, E24 discussed how new equity analyzes have significant price impacts on Euronext’s growth, as well as the large predominance of buy recommendations from brokerages over new companies.
He is in the process of taking action
According to the audit, no “fatal errors or defects in the license” were found during the audit of the Oslo Stock Exchange.
The treatment “characterized in part by very rapid hiring processes combined with a periodically large workload spread over a small number of employees”, as well as the failure to deal with all potential conflicts of interest when new companies are listed, are some of the important notes in the report.
Stock exchange director Ovind Amundsen replied that the Oslo Stock Exchange is in the process of taking measures “that will make the trading venue better”.
These include extending the admissions process from 10 to 15 days, dividing the listing section into ‘listing acceptance’ and ‘inserting sales’ and independent legal and financial due diligence requirements on all admissions.
“Explorer. Unapologetic entrepreneur. Alcohol fanatic. Certified writer. Wannabe tv evangelist. Twitter fanatic. Student. Web scholar. Travel buff.”