As the Finnish economy recovers from recession, local attitudes towards capital markets are changing. The switch is likely to provide a boost for Finnish equities at the same time as reducing the range of opportunities for participation in debt financing. The move from debt towards equity goes right to the top.
The Helsinki Stock Exchange (HSE) has experienced a resurgence of activity, spurred by privatization and a growing internationalization of trading in Finnish equities.
The recovery in the Finnish economy (turnover on the HSE official list in 1996 reached a record high of Fmk101.3 billion or $19.5 billion) has been as strong as the recession was deep. Despite recent volatility - the HEX index fell from a peak close to 3000 in early March, and is now trading at around 2800 - overall volumes held up through the first quarter, although they have slackened off more recently. However, the fall-off seems more likely to be a reaction to worldwide uncertainties, while rises in recent years reflect the underlying strength of the economy.
Stephen McClintock, outgoing managing director of Citibank International in Helsinki, has a decade of experience of primarily cross-border business with Finnish corporations.