The Frankfurt Stock Exchange Looks to Emerging Markets for Growth

Exchange is Targeting Russia, India and China

July 5, 2010 - There is no question that the Eurozone economic problems have slowed corporate finance activity for Europe’s financial centers.   In fact, Europe’s problems have resulted in Paris, London and Frankfurt seeing a substantial decrease in financial activity.  But the Frankfurt Stock Exchange has been holding its own compared to other European financial centers.

In 2006 more than 30% of global IPOs took place in Europe.  During the first quarter of this year Europe’s percentage dropped to 15%. 

In somewhat of an aggressive move, the Frankfurt Stock Exchange has initiated a strategy to increase business from Russia and China.  The Deutsche Börse, the owner of the Frankfurt Stock Exchange has also established a cooperation agreement with and obtained an equity interest in India’s Bombay Stock Exchange.  The purpose of the cooperation agreement is to promote the advantages of Frankfurt listings to Indian companies. 

One area that the Frankfurt Stock Exchange has targeted is the renewable energy sector.  Utilizing the facilities of the Frankfurt Stock Exchange and Frankfurt listings, more than 100 alternative energy and green technology companies have raised more than €10 billion since 1997.

But what about London?  As a financial center Frankfurt is often compared to London and its London Stock Exchange.  But the United Kingdom’s deep economic problems as well as increases in taxation that are affecting banks and individuals, are making it likely that London will shed its title as Europe’s number one financial center to Frankfurt.  And, companies in emerging markets are now seeing Frankfurt as preferable to London for a stock market listing.

Author:  Jeffrey Friedland