Italy: efficient market infrastructure to guarantee access to global capital to companies
In times of debate on the role of international investors and on the national economy’s capacity for dialogue with the markets, it is useful to remember the importance for Italy of having the efficient market infrastructure at its disposal that is able to guarantee access to global capital to both companies and the economic system.
by Andrea Sironi, Chairman of Borsa Italiana SPA & Professor of Banking and Finance at Bocconi University
Last November, at the Italian Equity Roadshow that was organized by Borsa Italiana in North America, 15 companies listed on our markets met 80 investors from 60 international investment houses. This was a key event to strengthen the relationship between the Italian companies – which, in this case, represented a total of 35Bn in market capitalization – and investors, who demonstrated a high level of interest by requesting over 200 meetings with the companies concerned. This was an important step in Borsa Italiana’s international roadshow program as North American investors are the primary investors in Italian companies, representing around 40% of the institutional investors in FTSE MIB companies.
That’s a fact that is worth thinking about. Italian Borsa-listed companies have access to a large and diverse international investor base. There are over 1,700 investment houses that invest in the stocks of companies listed on our markets, through more than 8,000 funds in 50 different countries. This is a distinguishing feature of the Italian market which, together with the significant presence of private local investors, contributes to Borsa Italiana’s record for turnover velocity, the relationship between capitalization and turnover which is one of the main liquidity indicators of a financial center. The national economy can rely on a financial infrastructure that is able to raise growth capital all over the world. Indeed, our companies regularly meet with investors in Italy, Asia, Australia, Europe, and North America thanks to a program of events that last year saw over 6,000 meetings organized between more than 300 listed companies and over 1,000 institutional investors.
This dialogue with the market not only guarantees capital to the companies concerned but also the exchange of know-how, the assimilation of sound corporate governance practices that lead to a result in competitive advantages and enrichment of the whole economic and financial system. Not to mention the possibility to intercept new market trends such as sustainability, which was the theme of a specific conference that was held by Borsa Italiana. The seventy-seven new listings in the last 2 years underline the capacity of banks and Italian and international advisors to challenge different market contexts and demonstrate the will of the investors to seek and reward company histories with Italian roots and international dimensions that find their natural reference market in Borsa Italiana. Pirelli & C. was the largest IPO in Europe in 2017; FCA, CNH Industrial, STMicroelectronics, and Tenaris benefit from their listing in Italy also relative to their “dual listing” in another market; while Brunello Cuccinelli and Ferrari are stocks that consistently have the highest value with respect to their international competitors.
Excellence and capacity for dialogue with the market are at the basis of the positive progress over the years in the STAR Segment, which comprises high-performance equities. These results have been achieved over the years by constructing a market “hub” to serve the financing needs of the global economic week and which today, more than ever before, is proving to be a competitive advantage for the entire Italian entrepreneurial system.