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Raising equity capital for growing stock corporations: Why the German stock market is losing its appeal
According to a report from www.faz.net, in Germany the stock market listing of stock corporations is rarely used to raise equity capital. There are various reasons for this, such as the tendency of private equity firms to delist acquired companies. In addition, some German companies, such as Birkenstock, Linde and Biontech, are drawn to the American stock market, where there are more interested investors and a higher willingness to take risks. This means that many German biotechnology companies are seriously considering going public only in the USA. Overall, the German stock market lacks appeal, even beyond the biotechnology sector. In 2023 the number of...
Raising equity capital for growing stock corporations: Why the German stock market is losing its appeal
According to a report by www.faz.net, in Germany the stock market listing of stock corporations is rarely used to raise equity capital. There are various reasons for this, such as the tendency of private equity firms to delist acquired companies. In addition, some German companies, such as Birkenstock, Linde and Biontech, are drawn to the American stock market, where there are more interested investors and a higher willingness to take risks. This means that many German biotechnology companies are seriously considering going public only in the USA.
Overall, the German stock market lacks appeal, even beyond the biotechnology sector. In 2023, the number of capital increases by listed companies and the volume of new share issues in IPOs reached a long-term low. This is problematic for economies that need to invest heavily in digitalization and energy efficiency.
The economists suggest simplifying the issuance of shares and reducing the costs of initial public offerings. However, the path to Deutsche Börse is too cumbersome and bureaucratic. It is suggested to simplify the issuance of shares and to use more periods of the year for an IPO.
There are also specific time windows, such as spring and the fourth quarter, that are particularly attractive for IPOs. Companies should definitely hurry up as the stock market's upswing won't last forever.
These developments have an impact on the financial market. If the stock market listing of companies is not increasingly used to raise equity capital, this can lead to an unhealthy dependence of companies on bank loans in the long term. This can affect the stability of the financial system and reduce the ability of investors to invest in promising companies. It is therefore of great importance that the incentives for IPOs are increased and access to the stock market is made easier.
Read the source article at www.faz.net