(Finance) – After a particularly important 2022 as regards the roadmap of the integration of Borsa Italiana in Euronext, 2023 promises to be an equally full year of appointments for the manager of Piazza Affari. The main focuses will definitely be the integration of Borsa Italiana markets on the Optiq trading platform of Euronext and the expansion of Euronext Clearing, the Italian Clearing and Guarantee Fund, to all the group’s markets, two projects that demonstrate how the relationship between Piazza Affari and its new European “home” is set up to bring benefits to both parties. “The first phase of integration required a lot of work, but we immediately focused on a two-way dialogue,” he says Fabrizio Testa, managing director of Borsa Italianain an interview with Finance, adding that “Italy has contributed with solutions that had already been adopted within the Borsa group or has chosen within the solutions of Euronext, to find us now in a position of improvement both infrastructure and customer services”.
The migration of Borsa Italiana markets to the group Optiq platform is also linked to the core data center relocation of Euronext, which in recent months was moved from Basildon (United Kingdom) to Ponte San Pietro, on the outskirts of Bergamo. “This is important because it will implement the single order book project, with which market players can participate – with a single connectivity – in the same liquidity pool and therefore increase – in the case of Italian markets – trading activities. This has already been successfully tested over the years in other geographies”, explains Testa.
Looking at the calendar, the manager remembers that a the end of March there will be migration of the Italian Cash and ETF markets to the Optiq platform, a September there will be migration of the fixed income and certificate markets, while a October the expansion of the Italian clearing house will begin, which will go from being the clearing house for the Italian markets to that of the whole group. This will lead Euronext to be “more competitive than other exchanges that already had clearing within their group”, he underlines.
However, the steps forward to create an increasingly competitive infrastructure are against a backdrop of a difficult situation for the capital markets. “Was a more difficult year than 2021when there was a record IPO and a very active primary market, but the drop in terms of trading was not as heavy as we might have expected – says the CEO of Borsa – Definitely the lists suffered from the strong repricing which occurred as a result of macroeconomic factors, especially linked to the reappearance of inflation, which central banks first struggled to identify and then manage, with consequences on both the equity and bond markets”.
A much considered data to measure the health of the markets is the influx of IPOs, events that are also highly commented in the media and which bring attention to the lists. In 2022, the trend of constant decline in the number of listed companies from the main list continued, in the face of strong growth in the unregulated segment, which is leading to a change in the profile of the Italian stock market, much more oriented towards small caps. According to Testa, “our list reflects very much the Italian industrial fabric. At the time, the Growth market was created together with the market operators to give an opportunity to access the capital markets also to medium-small and medium-sized companies on the Stock Exchange. The main market has certainly suffered and that is why we are engaged with the stakeholders – authorities and operators – to improve the competitiveness of the Italian markets”.
However, the manager does not see as plausible a scenario in which few marketplaces emerge in Europe for the listing of large companies with regional markets focused on SMEs: “In the setup of Euronext, with the creation of a single infrastructure and liquidity pool, countries are entry points to the largest liquidity pool in Europe, with 2,000 issuers and an aggregate market capitalization of around €6 trillion. The very fact that we have harmonized the quotation rules, on the Italian and European side, is precisely for this: to allow each geographical area, albeit with domestic peculiarities and needs, to take advantage of the European dimension“.
Another problem of the Italian price list is the stampede of medium-large companies due to delistings. This year it will be taken away from the Milanese square – adding up the capitalizations of the companies that left it – a good 43.3 billion euros. This data also includes more particular cases such as Exorwhich moved to the Netherlands, Banca Carige, which was incorporated into BPERand Cattolica Assicurazioni, which was absorbed by generals. The heaviest exits were those of Atlantia (almost 19 billion euros), Falck Renewables (over 2.8 billion euros) and Cerved Group (about 2 billion euros). If we also add the operations already announced but not yet implemented, we arrive at approximately 46.5 billion euros.
We certainly don’t like this phenomenon, but at the same time we have to be able to manage it, also because it’s not just an Italian issue”, explains the CEO. “THE delistings are quite cyclical and tend to be more pronounced in distressed markets – he adds – Obviously each case must be assessed on its own. We are very committed to making markets ever more efficient and competitive. Also because the The Stock Exchange allows companies to constantly interact with investorsuseful for growth”.
According to Testa, the problem shouldn’t even be posed as a competition between public markets and private equity: “The Stock Exchange is one of the building blocks of the capital market and it is a building block that allows access to assets that have been well scrutinized and often willingly become prey within M & A strategies. But after the delisting, a reorganization and perhaps some M & A operations, companies can return to the stock exchange. we see private equity as complementary rather than competingand the capital market is beautiful precisely because it has various players and various dynamics”.
To questions about the various problems of Piazza Affari, Testa responds, however, citing i significant progress made this year in terms of simplification of the regulation and increase in attractiveness of public markets. As far as the domestic dimension is concerned, a decisive boost was the MEF’s Green Book, whose proposals were then merged into the August interventions by Consob (in terms of simplified procedures for the approval of information prospectuses and the green light for documentation in English ) and in September by Borsa Italiana (which simplified the rules for IPOs for the benefit of companies intending to raise capital on the regulated Euronext Milan market). A series of proposals to simplify listing on the stock exchange by the European Commission (the so-called Listing Act) then arrived in December.
According to the CEO of Borsa Italiana, all these subjects have moved together because “there is a consensus on the need to change processes, procedures and regulations that have been there for a long time. The fact that comparisons can easily be made with other countries brings to the surface of situations of gold plating that have taken root. Starting from the same directive, over the years layers have been created to respond to specificities, which then became barriers to development. Now several shares are being grounded and I I found very fertile ground and a great desire to increase competitiveness by all stakeholders”.
If Borsa Italiana and Consob have done their part, and the measures proposed by the EU Commission are now being discussed for approval, there are still other issues to be resolved at the domestic level, as the next step in simplification requires the intervention of the legislators. A request from the operators is the review of the Consolidated Law on Finance (TUF), but various zero-cost interventions have also been identified by the Green Paper. Testa is positive about this: “There is certainly awareness on the part of politics, there is an open dialogue and there is the possibility of conveying these proposals, which have found broad consensus. It is a work that will surely take some timebut we are aware that this Green Paper is not a White Paper, therefore proposals that perhaps end up in the drawer and are forgotten”.