TALLINN — Is SEB Enskilda looking to the Baltic stock markets for more pension fund investments?
Of course pension funds are already investing in Tallinn to some extent but only in marginal amounts. In an interview published Monday in the Äripäev newspaper, SEB Enskilda board member Henrik Igasta said that investing Estonian pension funds on the NASDAQ OMX Tallinn stock exchange would help reinvigorate the [private_supervisor]market, still down from its “Baltic Tiger” peak two years ago.
Does this mean SEB sees an advantage in keeping the pension fund money local? Igasta didn’t say exactly how the pension funds would benefit — only the market.
Igasta said to create a sustainable stock exchange, pension funds must find a way to invest more in the local market, as the few funds meant for Baltic and other Eastern European markets do not motivate brokers to truly cover local shares and offer high-quality service for investors.
“I do no know any country in Western Europe where capital markets were built up without the participation of local pension funds,” Enskilda said.
However, this may not mean that Tallinn should expect an influx of SEB pension fund cash. On Monday Sven Kunsing, a board member of SEB Asset Management said that the problems of Estonia’s stock market originates with the absence of state’s bond market and he doesn’t see an opportunity for large-scale pension fund investment.
“A normal enterprise bond market is missing as well, and to tell the truth I don’t see a possibility for it to emerge as there’s not enough good and large eminent market players who would be interested in the existence of such market,” Kunsing told Baltic Reports.”The same problem applies on the Tallinn stock exchange as it is too narrow and not liquid enough to consider it as an asset category in the portfolios of larger pension funds.”
Kunsing insisted that the SEB branch in Estonia does not support investing the money of pension funds in local stock exchange compulsorily as it is in Poland as that kind of behavior causes market distortion.
Stock market stoked
Given the mixed signals, it’s unclear which way SEB will go. Naturally the stock exchange is stoked on the possibility that the pension funds will come its way. The market rallied several percentage points midday upon hearing the news before settling for a more modest 0.5 percent at close.
NASDAQ OMX Tallinn CEO Andrus Alber more than welcomed this idea.
“Of course I agree that some of the pension money should find its way to the Tallinn exchange,” Alber told Baltic Reports.
However, Alber admits that some enterprises find it better to go to larger exchanges, as investors and pension funds find that Tallinn exchange does not have enough large companies nor liquidity.
“Of course stable additional money would help the development, yet it’s not a magic potion — new large enterprises, such as Eesti Energia, are also needed,” said Alber.
Only 15 companies are on the Tallinn exchange, stocks are thinly traded. The biggest companies are the shipping company Tallink, real estate firms Arco Vara, and Merko Ehitus, newspaper publishing company Ekspress Group, Tallinn Water Company, and Olympic Entertainment.
State says hands off
When the second-tier pension system was launched in 2002, in addition to giving additional income for pensioners one of the goals was that the pension fund money would support the development of Estonian economy, according to Thomas Auväärt, director of the financial market department in the Ministry of Finance.
However, the ministry is not prepared to cull banks into investing more pension money in Estonian companies.
“It is questionable whether the state should interfere using a so-called force method and restrict investing in foreign countries with sanctions,” Auväärt told Baltic Reports.
While Poland has enacted such regulations for its pension fund scheme, most European Union member states have not. [/private_supervisor] [private_subscription 1 month]market, still down from its “Baltic Tiger” peak two years ago.
Does this mean SEB sees an advantage in keeping the pension fund money local? Igasta didn’t say exactly how the pension funds would benefit — only the market.
Igasta said to create a sustainable stock exchange, pension funds must find a way to invest more in the local market, as the few funds meant for Baltic and other Eastern European markets do not motivate brokers to truly cover local shares and offer high-quality service for investors.
“I do no know any country in Western Europe where capital markets were built up without the participation of local pension funds,” Enskilda said.
However, this may not mean that Tallinn should expect an influx of SEB pension fund cash. On Monday Sven Kunsing, a board member of SEB Asset Management said that the problems of Estonia’s stock market originates with the absence of state’s bond market and he doesn’t see an opportunity for large-scale pension fund investment.
“A normal enterprise bond market is missing as well, and to tell the truth I don’t see a possibility for it to emerge as there’s not enough good and large eminent market players who would be interested in the existence of such market,” Kunsing told Baltic Reports.”The same problem applies on the Tallinn stock exchange as it is too narrow and not liquid enough to consider it as an asset category in the portfolios of larger pension funds.”
Kunsing insisted that the SEB branch in Estonia does not support investing the money of pension funds in local stock exchange compulsorily as it is in Poland as that kind of behavior causes market distortion.
Stock market stoked
Given the mixed signals, it’s unclear which way SEB will go. Naturally the stock exchange is stoked on the possibility that the pension funds will come its way. The market rallied several percentage points midday upon hearing the news before settling for a more modest 0.5 percent at close.
NASDAQ OMX Tallinn CEO Andrus Alber more than welcomed this idea.
“Of course I agree that some of the pension money should find its way to the Tallinn exchange,” Alber told Baltic Reports.
However, Alber admits that some enterprises find it better to go to larger exchanges, as investors and pension funds find that Tallinn exchange does not have enough large companies nor liquidity.
“Of course stable additional money would help the development, yet it’s not a magic potion — new large enterprises, such as Eesti Energia, are also needed,” said Alber.
Only 15 companies are on the Tallinn exchange, stocks are thinly traded. The biggest companies are the shipping company Tallink, real estate firms Arco Vara, and Merko Ehitus, newspaper publishing company Ekspress Group, Tallinn Water Company, and Olympic Entertainment.
State says hands off
When the second-tier pension system was launched in 2002, in addition to giving additional income for pensioners one of the goals was that the pension fund money would support the development of Estonian economy, according to Thomas Auväärt, director of the financial market department in the Ministry of Finance.
However, the ministry is not prepared to cull banks into investing more pension money in Estonian companies.
“It is questionable whether the state should interfere using a so-called force method and restrict investing in foreign countries with sanctions,” Auväärt told Baltic Reports.
While Poland has enacted such regulations for its pension fund scheme, most European Union member states have not. [/private_subscription 1 month] [private_subscription 4 months]market, still down from its “Baltic Tiger” peak two years ago.
Does this mean SEB sees an advantage in keeping the pension fund money local? Igasta didn’t say exactly how the pension funds would benefit — only the market.
Igasta said to create a sustainable stock exchange, pension funds must find a way to invest more in the local market, as the few funds meant for Baltic and other Eastern European markets do not motivate brokers to truly cover local shares and offer high-quality service for investors.
“I do no know any country in Western Europe where capital markets were built up without the participation of local pension funds,” Enskilda said.
However, this may not mean that Tallinn should expect an influx of SEB pension fund cash. On Monday Sven Kunsing, a board member of SEB Asset Management said that the problems of Estonia’s stock market originates with the absence of state’s bond market and he doesn’t see an opportunity for large-scale pension fund investment.
“A normal enterprise bond market is missing as well, and to tell the truth I don’t see a possibility for it to emerge as there’s not enough good and large eminent market players who would be interested in the existence of such market,” Kunsing told Baltic Reports.”The same problem applies on the Tallinn stock exchange as it is too narrow and not liquid enough to consider it as an asset category in the portfolios of larger pension funds.”
Kunsing insisted that the SEB branch in Estonia does not support investing the money of pension funds in local stock exchange compulsorily as it is in Poland as that kind of behavior causes market distortion.
Stock market stoked
Given the mixed signals, it’s unclear which way SEB will go. Naturally the stock exchange is stoked on the possibility that the pension funds will come its way. The market rallied several percentage points midday upon hearing the news before settling for a more modest 0.5 percent at close.
NASDAQ OMX Tallinn CEO Andrus Alber more than welcomed this idea.
“Of course I agree that some of the pension money should find its way to the Tallinn exchange,” Alber told Baltic Reports.
However, Alber admits that some enterprises find it better to go to larger exchanges, as investors and pension funds find that Tallinn exchange does not have enough large companies nor liquidity.
“Of course stable additional money would help the development, yet it’s not a magic potion — new large enterprises, such as Eesti Energia, are also needed,” said Alber.
Only 15 companies are on the Tallinn exchange, stocks are thinly traded. The biggest companies are the shipping company Tallink, real estate firms Arco Vara, and Merko Ehitus, newspaper publishing company Ekspress Group, Tallinn Water Company, and Olympic Entertainment.
State says hands off
When the second-tier pension system was launched in 2002, in addition to giving additional income for pensioners one of the goals was that the pension fund money would support the development of Estonian economy, according to Thomas Auväärt, director of the financial market department in the Ministry of Finance.
However, the ministry is not prepared to cull banks into investing more pension money in Estonian companies.
“It is questionable whether the state should interfere using a so-called force method and restrict investing in foreign countries with sanctions,” Auväärt told Baltic Reports.
While Poland has enacted such regulations for its pension fund scheme, most European Union member states have not. [/private_subscription 4 months] [private_subscription 1 year]market, still down from its “Baltic Tiger” peak two years ago.
Does this mean SEB sees an advantage in keeping the pension fund money local? Igasta didn’t say exactly how the pension funds would benefit — only the market.
Igasta said to create a sustainable stock exchange, pension funds must find a way to invest more in the local market, as the few funds meant for Baltic and other Eastern European markets do not motivate brokers to truly cover local shares and offer high-quality service for investors.
“I do no know any country in Western Europe where capital markets were built up without the participation of local pension funds,” Enskilda said.
However, this may not mean that Tallinn should expect an influx of SEB pension fund cash. On Monday Sven Kunsing, a board member of SEB Asset Management said that the problems of Estonia’s stock market originates with the absence of state’s bond market and he doesn’t see an opportunity for large-scale pension fund investment.
“A normal enterprise bond market is missing as well, and to tell the truth I don’t see a possibility for it to emerge as there’s not enough good and large eminent market players who would be interested in the existence of such market,” Kunsing told Baltic Reports.”The same problem applies on the Tallinn stock exchange as it is too narrow and not liquid enough to consider it as an asset category in the portfolios of larger pension funds.”
Kunsing insisted that the SEB branch in Estonia does not support investing the money of pension funds in local stock exchange compulsorily as it is in Poland as that kind of behavior causes market distortion.
Stock market stoked
Given the mixed signals, it’s unclear which way SEB will go. Naturally the stock exchange is stoked on the possibility that the pension funds will come its way. The market rallied several percentage points midday upon hearing the news before settling for a more modest 0.5 percent at close.
NASDAQ OMX Tallinn CEO Andrus Alber more than welcomed this idea.
“Of course I agree that some of the pension money should find its way to the Tallinn exchange,” Alber told Baltic Reports.
However, Alber admits that some enterprises find it better to go to larger exchanges, as investors and pension funds find that Tallinn exchange does not have enough large companies nor liquidity.
“Of course stable additional money would help the development, yet it’s not a magic potion — new large enterprises, such as Eesti Energia, are also needed,” said Alber.
Only 15 companies are on the Tallinn exchange, stocks are thinly traded. The biggest companies are the shipping company Tallink, real estate firms Arco Vara, and Merko Ehitus, newspaper publishing company Ekspress Group, Tallinn Water Company, and Olympic Entertainment.
State says hands off
When the second-tier pension system was launched in 2002, in addition to giving additional income for pensioners one of the goals was that the pension fund money would support the development of Estonian economy, according to Thomas Auväärt, director of the financial market department in the Ministry of Finance.
However, the ministry is not prepared to cull banks into investing more pension money in Estonian companies.
“It is questionable whether the state should interfere using a so-called force method and restrict investing in foreign countries with sanctions,” Auväärt told Baltic Reports.
While Poland has enacted such regulations for its pension fund scheme, most European Union member states have not. [/private_subscription 1 year]
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