(Bloomberg) —
Initial public offerings in Sweden have hit a rough patch this year, as the country’s tech-heavy market falls out of favor with nervous investors.
Stockholm enjoyed a record haul of IPOs that helped clinch its position as Europe’s second biggest listing venue last year. That momentum has dissipated with only $44 million raised in 2022, data compiled by Bloomberg show, putting Sweden behind the likes of Norway, Italy, Germany, France and the U.K.
The Swedish market has been hit hard by a shift in sentiment early this year, as the prospect of tighter monetary policy fueled an exodus from pricey growth assets, while the invasion of Ukraine further dented risk appetite. The country’s benchmark has slumped 18% this year, more than the 14% drop in the wider European gauge.
Going public in 2022 has become harder, according to Claes Murander, portfolio manager for Lannebo Fonder AB’s microcap and nanocap funds. “The ones that will make it to an actual listing will have to be of above-average quality,” amid greater competition from listed stocks whose valuations have come down in the equity selloff, he said.
Technology companies and internet startup listings, which made up more than half of the number of Swedish deals in 2021, have slowed to a trickle as investors dump growth stocks. Meanwhile, IPOs from more defensive sectors, like Norwegian oil company Var Energi AS’s offering last month, have attracted strong demand.
The few listings in Sweden this year are all down 9% or more. And Volvo Car AB on Monday dipped below its October IPO price for the first time, wiping out post-listing gains of as much as 73%. The grim market mood has prompted some companies to hold off on going public.
Still, the slowdown offers a welcome breather after last year’s IPO deluge for some investors. Henrietta Theorell, who manages Swedbank Robur’s SME fund Smabolag Sverige, said she only invested in three listings in 2021, even as her phone ran hot with companies and banks vying for her attention.
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She expects activity to pick up in Sweden later in the year, depending on developments in Russia and Ukraine, saying investment banks are likely to push their high-quality IPOs out the door first.
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