The members of the Nordic Compass business alliance plan to create a single public market for stocks and other securities in order to attract investment and reduce the outflow of promising companies to the US stock exchanges. This is reported by foreign media with reference to a representative of Nordic Compass.
The combined market will create a single integrated public stock market with a total capitalization of 2.5 trillion euros and over 1.4 thousand issuers with "a completely different approach, higher speed, higher trading volume, better price determination and, ultimately, lower cost of capital."
The project aims to consolidate fragmented regional markets with agreed rules and integrated trading, clearing, settlement, and custody, while maintaining national exchanges as independent entities.
Nordic Compass unites 40 companies, investors and institutions from the Nordic countries (Sweden, Norway, Finland, Denmark, Iceland) in four areas: capital markets, deep technologies, defense and energy. The partners include EQT AB, Nordea Bank Abp and Novo Nordisk Fund, as well as Nasdaq Inc., Euronext NV and Euroclear Holding SA.
According to Nordic Compass, Scandinavian pension and sovereign wealth funds manage $4 trillion dollars and receive annual inflows of more than $175 billion. However, the region is experiencing difficulties attracting investments in fast-growing companies, including Spotify Technology SA and Klarna Group Plc, registered in the United States.
Any plan to optimize capital markets in Northern Europe will face obstacles, including national policies and legal hurdles. Nordic Compass has identified 500 companies from different industries that will need 35 billion euros ($39 billion) to finance growth over the next five years.
One of the new initiatives of the alliance is a proposal to recognize military equipment certified in one Nordic country throughout the region in order to simplify and accelerate arms purchases. The alliance also advocates the creation of common regional means of protecting underwater infrastructure, space surveillance, and military communications.
