"Inadequate financing represents our most significant challenge"
Rewritten Article:
CHAT WITH STÉPHANE BOUJNAH, HEAD CHEESE AT EURONEXT
In a candypants conversation with the big honcho at Euronext, Stéphane Boujnah, we delve into the mind of a man on a mission — to maintain European dominance in the cutthroat world of stock markets. He's betting on some dreamy initiatives to mobilize more dough in Europe, like a unified IPO prospectus for all Euronext exchanges. Let's get the lowdown on this Tasty guys' plans.
After Trump's reelection, Europe faces some wicked challenges. Capital market mavens guessed that a policy heavy on boosting the U.S. economy would drain dollars towards American stock exchanges, making companies' heads turn towards Uncle Sam. How can a European exchange operator keep up?
Boujnah isn't one to sugarcoat things. "Trump's second term is a slap in the face for Europe," he tells us. The U.S. is quitting the WTO rules game, playing hardball with taxes and deregulations that benefit American corporations and stock markets. For the Old Continent, it's time to buckle up, step out of the comfort zone, and show 'em what we're made of.
"Europe's current state is like a continent full of herbivores surrounded by carnivores," Boujnah says. The Continent should get a clue that it's not smart to hang around with opponents who only have their own interests at heart. Speeding up integration and creating European champions is the way forward, he emphasizes. Otherwise, we'll be living in a land of weaklings.
"Competition and open markets are the key, but economic well-being won't bulk up a civilization," Boujnah muses. "We may end up as a society of impoverished consumers who'll lose their jobs if these jobs move overseas." In other words, we need more kahunas in the European corporate world and more balanced structures which help both producers and buyers thrive.
The question is — where should these champions rise? The financial industry cries out for consolidation, Boujnah informs us. The largest French bank, BNP Paribas, pale in comparison to J.P. Morgan, the leading cookie in the U.S. market. Europe needs more large players to bolster its position in the world.
Is the EU's hardcore devotion to free markets and fierce competition at odds with the notion of champions? Nah, says Boujnah. "We have a fragmented financial market with low profit margins, facing a beefed-up American market with fat margins and big a$$ players," he explains. "There's no point in playing small ball when you can play for the pennant."
Boujnah expects 2025 to be a dynamic year — far more than 2024. "Euronext has a promising pipeline of IPOs," he boasts. The uncertainty level remains high, but he's still confident — especially when he looks at those juicy prospects lined up.
He won't disclose exact numbers or names, though. "A pipeline is flexible," Boujnah says, before winking like a seasoned pro. Companies may shift directions or postpone their plans.
The European capital market scene is stuck, both for equity and debt, asserts the Association for Financial Markets in Europe (AFME). With the U.S. grabbing all the gravitational force, what can be done to revamp Europe's risk-averse society?
The main problem is that most of the capital needs to come from private households, Boujnah points out. In the U.S., private households own more than a third of the stock market, while in Europe, the average is a measly 3%.
Europe has initiatives to boost new technologies, generating an unprecedented number of young companies primed for the stock market.
"Europe's not ready," Boujnah says. "One of the main reasons for this lackluster IPO market is companies' reluctance to go public and prefer private equity instead. You can't blame them, especially when those moneybags are ready to pump funds for growth, with no public scrutiny or accountability."
Euronext decided to create a single prospectus for IPOs, similar to the U.S.'s S1-form. Don't expect Boujnah to sit and wait for rules to change from the top. Instead, he's pushing initiatives from the ground up, like building concrete things.
He's approached Deutsche Börse about the unified prospectus, but they ain't listening. For now, he's focusing on making the unified prospectus work in their seven markets before forcing anyone else to join the party.
"If they want in, they can be our guests," Boujnah laughs. We need to see more of these homegrown initiatives instead of waiting around for top-down rules to change things, he insists.
Euronext is the leading platform, a solid starting point. A quarter of all European stocks are traded on their platform, with €10-12 billion in shares exchanged daily. The cumulative market capitalization is around €7 trillion, twice as much as London. Euronext handles equity capital and gets more international listings than any other European exchange operator, even beating out CVC, which is based in London.
Boujnah dreams of making Euronext the go-to spot forEuropean companies choosing to go public, rather than scampering across the pond to the US.
- Stéphane Boujnah, head of Euronext, is aiming to maintain Europe's dominance in the stock markets by launching initiatives to mobilize more money in Europe, including a unified IPO prospectus for all Euronext exchanges.
- In 2025, Euronext expects a dynamic year with a promising pipeline of IPOs, despite the high level of uncertainty.
- The European capital market scene is currently struggling, both for equity and debt, due to private households owning a mere 3% of the stock market compared to more than a third in the U.S.
- European companies prefer private equity over going public due to the lack of public scrutiny and the availability of funds without accountability, according to Stéphane Boujnah.
- In an effort to increase the number of European champions, Stéphane Boujnah has approached Deutsche Börse about creating a unified prospectus, similar to the U.S.'s S1-form, for IPOs in their seven markets, inviting others to join if they wish to participate.
