‘Infighting in Europe will push stock exchange activities to the US or Asia’

According to Jos Dijsselhof, these are signs that the stock market drought is coming to an end.

“Every IPO we have helps make the environment more positive,” he says.

Dijsselhof says the stellar performance of Galderma, which was oversubscribed and remains well above its IPO price, should encourage others looking to go public. He adds that there was still some concern in January about a stock market listing this year, but he wouldn’t be surprised if recent successes prompted companies to leave now.

“SIX’s recent success is the result of the exchange focusing on its niche,” says Dijsselhof. Galderma and Puig are cosmetics companies, which he says is an area where the exchange, along with pharmaceuticals and chemicals, has a strong track record. “This allows us to compete globally. All fairs have to find their niche,” he says.

The listing market is slowly emerging from a period of sluggishness, but still lags behind the heady days of 2021. The appeal of New York as a premier listing destination remains strong, especially among UK companies.

CRH, Ferguson and other infrastructure companies have moved their primary listings from London to New York, in part to take advantage of the $500 billion set aside for infrastructure spending in the US Inflation Reduction Act. Technology companies also continue to flock to the Nasdaq, which is seen as the natural market for the sector.

“This has been a major shift in the market,” says Dijsselhof. Historically, defaulting companies would go to their home market for a stock exchange listing and only exit if there was a compelling reason to do so. Now every company is exploring its options. He adds: “(Exchanges) compete more with each other.”

A recent wave of companies looking to list in the US is also a symptom of a broader malaise in Europe, says Dijsselhof. Volatility and trading volumes have fallen on most major European exchanges: “The stock market is a reflection of the underlying economy.”

In 2023, the British and French economies stagnated, while Germany’s shrank slightly; the US, on the other hand, defied expectations and experienced fairly robust growth.

“If there is more growth in Europe and companies can grow their business here instead of having to go to the US or Asia, then the stock market will also do better,” he says. “It is not an isolated market that determines everything itself. ”

The fierce competition between exchanges to gain listings comes as other regions mature and expand. He cites the explosion of family offices in Singapore, which grew from 400 to 1,500 four years ago, and the rising number of financial services firms moving to the Middle East.

“These are forces that must be taken into account,” he says. “If we are going to compete between London, Frankfurt, Paris and Switzerland, everything will go to the US, Asia or the Middle East.”

Dijsselhof is skeptical of the EU’s efforts to build its capital market through its Capital Markets Union policy. The EU’s efforts to centralize regulation have so far not borne fruit: the regulatory landscape remains fragmented, with national regulators responsible for most regulation and supervision. “It is a typical political EU project. It’s too slow and requires too much consensus. If you move a little, you don’t really move forward.”

He adds that the EU should include the British and Swiss capital markets in their talks: the two countries agreed in 2023 to recognize each other’s regulations as equivalent. He says this was a step in the right direction and hopes it can serve as a framework for a similar regime between Switzerland and the EU.

“Rationally speaking, it has to be done. It is so important that Switzerland is connected to the EU,” he says.

However, Dijsselhof says the problems facing European capital markets stem from a broader weakening of the financial sector. “We no longer have strong investment banks in Europe. If US investment banks are involved (in a stock exchange listing) they might say: ‘Have you ever thought about the US?’ I would like to see stronger European banks with strong investment banking capabilities.”

SIX is also committed to digitalizing the plumbing of capital markets. It has formed a partnership with the Swiss National Bank to allow trading of various bonds on SIX Digital Exchange using a central bank digital currency – e-Swiss franc – to buy and sell the securities. These are then settled via the digital ledger.

To date, seven bonds worth almost CHF 1 billion have been issued. “This is not a proof of concept; it’s real life. What we do is underestimated by the financial sector.”

SIX previously tested the feasibility of issuing new financial instruments on the blockchain, but required companies to purchase ‘SIX digital tokens’. This created a credit risk for investors. The e-Swiss franc CBDC means the risk is gone.

Dijsselhof adds that the tokenization of central bank currencies will boost the adoption of distributed ledger technology in the capital market.

“It’s a matter of time,” he says. “The biggest advantage of the whole technology is that every bank can downsize its securities services departments. If there is a single source of truth, we don’t all have to have our own administration and spend all day trying to reconcile.”

CV

Born
1965

Education
2005
MOM, INSEAD Business School

1991-92
MSc, business administration, Amsterdam University of Applied Sciences

1987-91
BSc, computer science, Drenthe University of Applied Sciences

Career
2017–present
CEO, SIX

2014-17
Group COO, Euronext

2012-14
General Manager, Group Hubs, ANZ

2010-12
General manager operations, Asia Pacific, Europe and Americas, ANZ

2008-10
Head of Group Operations Asia Pacific, RBS

2006-08
Head of Operations, Asia Pacific, ABN Amro

2003-05
Global Head of Financial Market Operations, ABN Amro

1994-2003
Various roles, ABN Amro