Sunday 22 July 2018

ISE sets new records as its independence draws to a close

Donal O'Donovan

Donal O'Donovan

Firms raised €5.1bn in equity by issuing shares on the Irish Stock Exchange in 2017, in what's likely to have been the 225-year-old bourse's last year as a standalone exchange.

The ISE announced its takeover by bigger, pan-European rival Euronext in a deal valued at €137m at the end of last year.

The main ISEQ index of Irish shares rose 8pc and equity turnover, a measure of the value of trading activity, recorded its sixth consecutive year of growth, according to the Irish Stock Exchange review of 2017 published yesterday.

That was a result of higher values, as the number of trades was little-changed.

Although best known as a share exchange for domestic listed companies, the ISE was ranked as the world's number one venue for bond and investment fund listings worldwide.

Although relatively obscure, compared to share trading, there are more than 36,700 individual securities from 90 countries listed in Ireland. Those deals can be large, and internationally important. The Kingdom of Saudi Arabia listed the world's largest ever sukuk issuance in Dublin last year. The Sharia law compliant debt totalled US$9bn.

The past year also saw debt issued by companies like Ryanair, Nokia and RSA Insurance as well as governments from as far afield as Kuwait and Oman and from the Irish Government itself. The National Treasury Management Agency (NTMA) increased the amount of Irish Government securities in issue by raising €19bn from international investors on the ISE last year.

More mainstream shares listings in 2017 included the €3.4bn AIB share flotation, the largest anywhere in Europe in the year, and initial public offerings by housebuilder Glenveagh Properties and wind energy investor Greencoat Renewables.

"It has been a stellar year for the ISE. For the first time we have over 30,000 debt securities listed and we are the number one exchange in the world for new and total bond listings as well as investment funds at the end of 2017," said Irish Stock Exchange CEO Deirdre Somers.

She said the acquisition by Euronext was the start of a "new chapter of great opportunity" for the exchange and that the Dublin market would have a distinct role in the larger group.

"Our role as the group centre of excellence for listing debt, funds and exchange traded funds (ETFs) within their federal model and the development of innovative services for equity issuers and SMEs is hugely exciting for our future," she said.

At the end of November, the Irish Stock Exchange agreed a sale to Euronext, which also operates the main exchanges in Paris, Amsterdam and Brussels.

The Irish Exchange's outsized share of the European market for listed debt and fund securities was a key attraction.

The deal came about in significant part as a response to Brexit. The ISE sale will end local brokers' control of the exchange. Davy has the biggest stake in it, with a 37.5pc holding. Goodbody Stockbrokers, which is owned by Fexco, has a 26.2pc stake; Investec, 18pc; RBS 6.3pc; Cantor Fitzgerald 6pc; and Dublin-based firm Campbell O'Connor has a 6pc holding.

Those firms will share a windfall of around €100m as a result of the sale, however.

Irish Independent

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