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IPE special report May 2018

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Helsinki Exchanges acquire Estonian bourse

ESTONIA/FINLAND - Helsinki Exchanges Group (HEX) has announced that it is buying a majority share in the Tallinn Stock Exchange (TSE) and extending its operational trading system to the Estonian bourse. Thus, Helsinki will spread its home market by taking over facilities management at the e1.8bn Tallinn exchange.

" Integrating the Estonian securities market into international structures is major strategic priority for the Tallinn Stock Exchange. We believe that his would mean much easier access for investors and better visibility for local companies, therefore enhancing the liquidity and attractiveness of the Estonian capital market," says Gert Tiivas, chief executive officer of TSE.

The buy out of existing shares and the directed subscription of new shares will be decided at TSE's annual general meeting but the supervisory board of the exchange has already welcomed the co-operation.
" The ownership issues should be solved in the next few months, but we would like to see core activities, or operational aspects, solved within this year," says Eva Palu, head of investor relations at TSE.

The move would also mean an end to Tallinn's talks with Norex, the alliance that joins Copenhagen, Oslo, Reykjavik and Stockholm stock exchanges. Last May, the three Baltic bourses signed a letter of intent to join the Nordic group.

Of the two options they thought that integrating to Helsinki was the better one. "The alliance model is clumsier and more complicated than when you are buying up somebody, you have to have direct interest and responsibility," says Palu.

International investors own around 70% of the market value of the Finnish stock exchange listed companies and the number of remote members has recently surpassed that of local members, totalling over 40, the exchange says.
" HEX's Finnish and international members comprise an extensive trading network, that will expand the group of investors with direct access to Estonian markets. This arrangement is globally unique in the marketplace industry and we should all be very proud of the achievement," says Jukka Ruuska, president and chief executive officer of HEX.

The market capitalisation of TSE-listed companies was at e1.8bn as of January 31, 2001, with a daily trading volume of e1.4m last year.

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