Small & Midcaps European Panorama 2017
An alert in the European equities landscape: market erosion confirmed
For the third consecutive year, the Small & Midcaps European Panorama, published by La Financière de l’Echiquier (LFDE) and the MiddleNext Research Institute, analyses the major trends and the dynamics and issues at stake in the European equities landscape.
The 2017 issue confirms the long-term trends observed over the past few years
– The small & midcaps segments have significantly outperformed in terms of economic performance and market returns compared to large caps, while the inversion in volatility levels among small & midcaps vs large caps has been amplified steadily year after year
– After a two-year respite, the number of listed companies has begun to decline once again: from 2007 – 2016, no less than 851 companies were delisted
– The small caps market in particular has continued to decline, both in terms of weighting and the number of listed stocks (-20% over the past ten years) threatening the future of the entire market landscape
– The global trends observed are replicated across most European countries, particularly major countries such as France, the UK and Germany which have seen their investment universes contract in the absence of sufficient bottom-up inflow
– Local initiatives have demonstrated the success of measures supporting small caps. Sweden has set a positive example, with the number of listed companies increasing by 74% from 2006-2016
– The MIFID 2 directive is likely to further concentrate order flows towards a restricted number of global players.
LFDE Chairman and CEO Didier Le Menestrel highlights “the European equities market drying-up at its roots is a real cause for concern which must be tackled immediately. There are a number of possible solutions, as demonstrated by the success of several excellent local initiatives such as in Sweden and in Italy, which have both implemented creative measures for steering savings towards the local economy. On the broader European scale, the development of a specific regulatory tax framework covering investments in listed companies would be beneficial for investors and for the wider economy”.
MiddleNext General Manager Caroline Weber adds “the chief impact of the enforcement of the MIFID 2 directive will be to drastically reduce small cap research coverage and jeopardise local-broker business models. Without support from research, there is a risk that the pool of European smaller companies will dry-up even more rapidly. This is a key issue, as the future of the entire French market landscape hinges on the development of start-ups. It is vital to introduce more stable regulations working in favour of fledgling companies”.
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Laurent Sécheret / email@example.com / +33 (0)1 53 23 87 48
Géraldine Fanara / firstname.lastname@example.org / +33 (0)1 47 23 98 12
Anne-Charlotte Créac’h / email@example.com / +33 (0)1 53 70 94 21
Caroline Weber / firstname.lastname@example.org / + 33 (0)6 80 21 64 68
About LFDE – www.lfde.com
Founded in 1991, LFDE is one of the leading independent asset management companies in France, with a team of more than 100 staff managing over 8 billion euros in AUM. LFDE, which is fully-owned by its managers and employees, manages financial savings and investments for retail clients, wealth advisors and institutional investors.
About MiddleNext – www.middlenext.com
MiddleNext is an independent French professional association representing listed midcaps. Founded in 1987, MiddleNext represents and defends the interests of midcaps, by promoting and federating listed companies and guiding managers through its training institute. Its research institute helps promote midcap awareness. MiddleNext co-presides over the Smaller Issuer Committee of European Issuers, which is the leading European association promoting the interests of more than 9,200 listed companies across 15 countries and representing a combined market cap of approximately 8,500 billion euros. MiddleNext is presided over by Guillaume Robin and managed by Caroline Weber and a Board of Directors composed of 12 listed company managers.