Nordea On Your Mind: Liquidity drought

The new MiFID II regulation could make it more difficult for smaller companies to raise capital.

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MiFID II: What to do without research

The new MiFID II regulation became a reality in the EU on 3 January 2018, requiring equities businesses to unbundle their service into charging investors separately for trading execution and research. This change challenges established business models for investment research and will likely lead to less coverage of small- and mid-cap companies.

Less coverage reduces investor interest and subsequently trading and liquidity, increasing volatility, making it difficult to use equity-based executive incentive plans and attract long-term shareholders. For companies that lack sufficient coverage, a commissioned research service from a bank or broker is a tool that could help alleviate the risk of falling off investors’ radar screens entirely.

Read the full Nordea On Your Mind: Liquidity drought

Also out today: Our Market Research team takes a look at how the liquidity tide is ebbing after years of central bank asset purchases and monetary expansion. Read “Central bank liquidity: Into the desert

Don’t miss our webinar, recorded on 30 May, in which Nordea Markets’ Johan Trocmé, Ellen Benktander and Hemming Svensson dive into the latest NOYM theme, “Liquidity drought”, and what listed companies can do to generate interest in their share. Watch the webinar

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Analysts
Johan Trocmé | Director, Thematic Research | +46 101 56 34 22 | Analyst info
Ellen Benktander | Analyst, Thematic Research | +46 101 57 28 87 | Analyst info
Hemming Svensson | Analyst | +46 101 570 966 | Analyst info

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