Venture Capital – Neuer Markt could go it alone

Much of the success of the Euro.NM alliance of growth company markets is attributable to its German member, the Neuer Markt. At the end of last year, more than 200 companies with a combined capitalisation of almost euros 100 billion were listed on the Neuer Markt out of Euro.NM’s combined tally of 345 listings capitalised at some euros 122 billion ($123 billion).

The discrepancy between the vitality of the Neuer Markt and Euro.NM’s other constituent markets – Le Nouveau Marche in France, the Nieuwe Markt in Amsterdam, Euro.NM Belgium and Italy’s Nuovo Mercato – has given rise to suggestions that the German market may soon opt out of the alliance to go it alone.

The restructuring programme announced by the Neuer Markt’s owner and operator Deutsche Borse late last year lends weight to such conjecture. Deutsche Borse, which is to change its name to Euroboard, aims to raise Dm1 billion (euros 509 million) via demutualisation and plans to use the proceeds to ramp up its electronic trading and support a broader marketing drive for the Neuer Markt. Tellingly, Neuer Markt has not yet joined the trading link between Euro.NM’s French, Belgian and Dutch members.

Deutsche Borse statements, however, have confirmed its commitment to the Euro.NM alliance, which plans major expansion during the course of this year. Nevertheless, many investment bankers are predicting that Neuer Markt will choose to relaunch itself as an independent in the coming year.

Although Easdaq, the pan-European growth stocks market, would no doubt welcome the drastic reduction in Euro.NM trading volumes that would result from such a move, an independent Neuer Markt would constitute a formidable rival to Easdaq in its own right. The German market for technology stocks is already double the size of Easdaq and is home for the majority of Euro.NM’s dual and cross-border listings.