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Northern stock exchanges seek united
strength
INTEGRATED STOCK EXCHANGE FOR THE BALTIC REGION
On September 2003 the stock exchange business in the Baltic
region took a step closer to becoming and integrated trading
place. Swedish OM and the Finnish exchange operator HEX merged
then to form OMHEX, the largest securities market in Northern
Europe and a leading provider of marketplace services and
solutions for the financial and energy markets.
OMHEX is made up of two divisions: OM Technology and HEX
Integrated Markets. OM Technology is a provider of solutions
and services and over 300 customers in 10 countries rely on
OM’s technology to run their marketplaces. HEX Integrated
Markets is the integrated Nordic and Baltic marketplace for
securities, giving customers access to 80 percent of the Nordic
securities market. HEX Integrated Markets includes Stockholmsbörsen,
HEX Helsinki, HEX Tallinn and HEX Riga.
The stock exchanges’ operations will continue unchanged,
but the company’s aim is to develop an integrated Scandinavian
and Baltic securities market. The exchanges in Copenhagen,
Oslo and Vilnius were also invited to join in the cooperation
while the merger was being announced.
“The merger between OM and HEX will bring about an improvement
in the liquidity of Scandinavian and Baltic securities, which
will make considerable cost savings possible,” says Jukka
Ruuska, the new company’s deputy managing director with
responsibility for running the Group’s stock exchange
operations.
Cost savings will be created particularly from combining
the trading systems, as the proportion of IT costs in relation
to the trading volume will be reduced.
Different lists
OM HEX’s headquarters are in Stockholm, but stock exchange
operations will be managed from Helsinki. Ruuska says that
lying behind the choice of Helsinki is experience.
“Helsinki was chosen from two good alternatives, principally
because HEX has experience in regional integration in the
Baltic region and in integrating value chains i.e. dealing
with settlement and custodian services both in Finland and
the Baltic countries,” Ruuska states.
The new stock exchange will create various lists to meet
investors’ needs. There will be lists for each country
for investors who will want to trade in domestic stocks, but
there will also be lists for different fields of activity
and a combined list for the biggest companies in Finland and
Sweden.
“The aim is to create from the customer’s perspective
one single integrated market. Customers, both brokers as well
as companies and issuers will be linked to the market by local
legal units,” Ruuska explains.
Nokia’s contribution
Helsinki Exchange’s share of the global trading in Nokia
shares has increased considerably in a couple of years.
“It has risen from 37 per cent in 2000 to some 65 per
cent at the moment. While the turnover in other stocks has
suffered because of uncertainty in the market, Nokia’s
volumes have remained at a good level, and this has led to
a rise in the proportion of Nokia shares traded compared with
the total turnover of the Helsinki Exchanges.” Ruuska
adds by way of background information that Nokia accounted
for 70 per cent of the total turnover at the beginning of
2003.
The weighted value of the Nokia turnover on OM HEX will go
down, but the stock exchange’s significance as a worldwide
trading place in Nokia shares will increase slightly. HEXIM
will have more than 3/4 of the global trading in Nokia.
Nokia is, naturally, one reason for OM’s interest in
HEX, but there were other reasons. “The basic driving
forces were a wide, shared broker base, the several Finnish-Swedish
companies created as the result of reorganizations such as
Stora Enso and TeliaSonera, similar legislation for the securities
market, and, of course, close cultural ties,” Ruuska
says.
Telecom and forest sector
On the list of European stock exchanges OM HEX is the seventh-biggest.
London, Euronext and Germany are still much bigger, but OM
HEX is starting to be in the same class as Zürich, Milan
and Madrid in terms of its turnover. OM HEX will be seeking
additional growth from the telecom and forest sectors.
“We’ll have an extremely strong telecom and technology
sector. We believe that we’ll be able to provide world-class
visibility for companies other than those on our domestic
market. HEXIM could offer a European trading place, for example,
to Asian companies that want our awareness of them to be increased,”
Ruuska believes.
In the forest industry HEX Integrated Markets will be the
leading trading place.
“The aim is to offer the world’s best liquidity
to Nordic and Baltic countries, and world-class visibility
in the forest sector so that it could interest forest companies
from elsewhere as a listing place,” Ruuska says.
Photo: Jukka Ruuska will lead the stock exchange operations
of the integrated trading places from Helsinki
Published 2004
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