List structure on OMX Baltic Market will change on May 21

18.05.2007 VLN

List rearrangement is the next step towards creation of fully integrated Baltic securities market. At present 99 companies are listed on Baltic market with market capitalization exceeding 14 billion euros. Changes in existing list structure are aimed at harmonization of the market structure and market practices across Baltic exchanges, thus increasing its attractiveness to investors.

Baltic Main List
New admission and listing criteria will be applied to the Baltic Main List. Issuers on Baltic Main List will have to meet one of the following free float criteria: at least 25% of shares (the current criterion) or shares worth at least EUR 25 million must be held in public hands (free float shares). Compliance of issuers with above-mentioned criteria will be assessed on a regular basis in order to provide investors with constant access to high-quality investment opportunities.

The new requirement is a step towards higher liquidity on the Baltic Main List and will benefit the companies that wish to attract higher interest from investors. This initiative was supported during consultations with investment specialists who claimed that free float value starting from EUR 20…25 million is necessary to realize high quality investments and attract foreign institutional investors.

At present there are 31 companies listed on Baltic Main List. For the first time the compliance of issuers on the Baltic Main List with the new liquidity requirements will be evaluated in November 2007. Companies that will not be able to meet the requirements will be given 6 months transition period. In case of compliance after the period, companies will remain listed on the Baltic Main List. In case companies will not comply with the requirements after the transition period, they will be transferred to the Baltic Secondary List.

New list – Baltic Secondary List
Changes in the list structure will affect companies on the current Baltic I-List and Free Lists as both lists will be merged and companies on those lists will be traded together in the same list – Baltic Secondary List. This move will reduce current fragmentation of the lists in the Baltic market and will offer investors clearer list structure. At present there are 37 companies listed on Baltic I-list and 31 companies on Baltic Free list.

After list rearrangement companies on Baltic Secondary List will have no free float requirements (as opposed to 15% or 25% requirement for I-List companies now) but will have the same information disclosure requirements that are applicable to I-List companies currently. After merger of the lists, current Free List companies will be included in calculation of OMX Baltic All-Share index, OMX Baltic Sector indexes and OMX Riga All-Share index. In addition to that those securities will be classified in accordance with Global Industry Classification Standard (GICS) improving their comparability with peer groups.

One of the reasons behind changes in list structure is introduction of alternative marketplace First North in Baltic countries. First North will operate in parallel to the regulated market, but with requirements that are easier to fulfill.

After the list rearrangement and introduction of alternative marketplace the Baltic market structure will consist of the following segments: 

• Regulated market with two lists (Baltic Main List and Baltic Secondary List) instead of three lists (currently) – as of May 21; 
• Alternative market First North – to be introduced in the closest future.