Without state support to involve state businesses in the capital market, it will not be possible to increase activity at the exchange, said Nasdaq Baltic market manager Indars Ascuks.
“Purely mathematically – if we look at large companies that are not owned by the state or a single large strategic partner that is possibly quoted at the exchange, there aren’t many of them. It is not possible to double or triple the size of the capital market if state-owned companies are not involved,” Ascuks said.
He emphasized that there weren’t many investment opportunities available on Latvia’s capital market. This is why Latvian pension funds, which currently hold EUR 2.7 billion, find it difficult to invest this money in assets associated with Latvia’s economy. According to a report from Latvian pension funds, total pension funds’ investments into company shares quoted on the capital market form 0.1% from all pension fund assets.
“There are companies that would be fit for the exchange, like Latvenergo, which is already very successful in bond release and currently works on the market ruled by competition. This is why we believe it would be necessary to review the list of non-privatized companies. But this is a task for politicians,” says the head of Nasdaq Baltic market.
“Both Tallinn and Vilnius exchanges have companies representing financial, communication, energy and other industries. This is partially the answer, because large businesses in Latvia remain owned by the state. We’re not saying it is the responsibility of the state. Nevertheless, the state can do a lot more to improve the capital market. The capital market has a value in itself. It is hard to find a country with a well-developed capital market and low welfare level,” Ascuks said. (BNN/Business World Magazine)
