Although the new bells in the Spanish stock market have been reduced to zero in recent years, there is an index where companies keep their hopes of starting trading alive. Unlike the steady market in 2022, where only Opdenergy makes a splash, BME Growth included 15 names up to 134. In the first six months of 2023, five companies (Greening, Miciso Real Estate, Ktesios Real Estate, Milepro, Cox Energy) began trading here, and another one (Indexa Capital) is expected to enter the list. And if nothing goes wrong in the second half of the year, more ads will appear on the so-called SME exchange. What does this market have to attract more than it is permanent?
The biggest reason for this is the size of the companies. “Spain is a country traditionally dominated by a business network of small companies that have had difficulty growing,” says XTB analyst Joaquín Robles. Continuously leaping to the market, The free float ratio is required to be at least 25% and to have a certain volume.therefore BME Growth will always be more affordable.
If the requirements are met, the company must always make a payment that isn’t worth the face to go public. To ease the burden, the National Securities Market Commission (CNMV) announced a November lowering costs to encourage listing of firms, especially SMEs. Francisco Blanco, co-founder of consulting firm Sigma Rocket, assures that today it is “easier to go public than it was 20 years ago”, which is why more and more names are being seen at BME Growth.
Access to finance
There Many reasons why SMEs choose BME Growth. One is access to finance such as Greening, which goes public to fund its business plan, and Indexa Capital, which aims to raise capital for future corporate operations such as buying a company. Other firms want to support their growth by listing shares like Ktesios or expand their investments like Milepro. As CEO Enrique Riquelme explained, the initial launch for Cox Energy will allow them to reach more investors and increase the visibility of the action and its return to shareholders.
All Because they are Socimis, they share the ownership and energy of the real estate sectors.. Robles says legacy companies are interested in BME Growth “because of its tax treatment” and energy companies “to access larger sources of financing when developing capital-intensive projects.” They are generally very low liquidity companies and trade by fixation, meaning they pre-sell for one hour in the morning and one hour in the afternoon, with a limited number of trades and few notable moves.
Overall, BME Growth values fell 2.28% to 1,934.60 (closed June 29), but Increased by 50.8% since the start of quarantine in Spain (March 16, 2020).
In the end, the companies that enter this market are small, expanding companies that grow rapidly in three or four months, and BME Growth is a way to build trust. “The challenge – Blanco repeats – is persistence,” Blanco adheres to practices such as making the company’s expectations public and providing periodic information to investors. “If you don’t publish quarterly results, you’re gone six months without notice, and that’s a long time in the stock market, but even more so in BME Growth,” he adds. An example is EiDF, which was suspended from the exchange because its new auditor refused PwC to close its accounts.
The end of the departure drought?
Despite the good performance of the markets in recent months, such as the Ibex 35, which hit the highest levels of the year after the banking crisis in March, monetary tightening and uncertainty regarding the economic outlook suggests that the IPO drought will continue. “And it might delay the plans of some speculated ones, like OKMobility and Cirsa,” Robles stresses, as well as the plans of Tendam and Idealista. Cosentino also delayed his exit due to instability in the capital markets and convictions from silicosis cases.
The same is not true for BME Growth, here Yes, new additions expected this yearRenta 4’s head of corporate analytics, César Sánchez-Grande, points to something that cannot be ignored given the international economic situation and the prospects for a slowdown in countries “provided that market conditions do not take a drastic turn”. . “BME Growth will continue to attract companies’ interest in the years to come,” Blanco confirms. And also in the coming months, because the exits are usually concentrated before the summer and in the fall. “There will be companies that will process the documents,” he adds.