Insufficient funds is our most significant disadvantage.

CHATTING WITH STÉPHANE BOUJNAH: EUROPE'S FINANCIAL POWERHOUSE

Insufficient funds is our most significant disadvantage.

Euronext CEO Stéphane Boujnah is pushing for initiatives to mobilize more equity capital in Europe, such as a unified IPO prospectus for all seven Euronext exchanges. He expresses his enthusiasm for the German Exchange to join the fray. He envisions 2025 as a much more dynamic year than the preceding one due to a record number of young companies ready to make their stock market debut. He's not a fan of a new IPO platform but supports further consolidation among market operators.

Boujnah discusses the challenges faced by Europe following Donald Trump's re-election, with market participants expecting a policy focused on strengthening the U.S. economy to bring more capital to U.S. exchanges. His response to this? Europe needs to accelerate integration and produce more European champions or risk remaining in a weak position.

When asked about champions emerging, Boujnah emphasizes the need for consolidation in the defense and financial industries. He believes Europe needs bigger players to remain relevant in the world, particularly in the financial market, where the EU's largest bank, BNP Paribas' market capitalization is one-tenth of J.P. Morgan's, the largest U.S. bank.

The EU has advocated for free markets and fair competition, which Boujnah believes fits with the concept of champions. However, he acknowledges the fragmented financial market in Europe, which faces an integrated American market with large players and fat margins. To counter this, Boujnah suggests a balanced structure with producers and consumers in various industries, ideally across Europe.

Boujnah expects IPO volume to surge in 2025, with companies vying for aggressive fundraising. He notes an unprecedented number of young companies in Europe ready for the stock market, thanks to numerous technology promotion programs across European countries.

Boujnah identifies the lack of capital as Europe's overall weakness, primarily because most capital needs to be mobilized from private households. However, he notes that European cultures typically have low levels of individual investment in stocks compared to the U.S. To tackle this, a comprehensive reform of Europe's social security systems is required to direct household savings towards the capital markets.

Boujnah believes that Euronext has proven successful in mobilizing equity capital in Europe. Compared to the US, where private households represent 30% of the stock market, the average in Europe is a mere 3%. However, he emphasizes the importance of short-term measures to mobilize equity capital, such as implementing a risk perspective and reducing regulations to encourage investment.

Overall, Boujnah believes that Europeans can no longer play by the old rules in a world where the U.S. is turning inward and making decisions in its own interest. He is optimistic that a unified European approach, focusing on harmonizing capital markets, leveraging technological sovereignty, and fostering investor confidence through policy and structural reforms, will help Europe compete with U.S. markets.

1. Stéphane Boujnah, CEO of Euronext, sees 2025 as a more dynamic year due to a record number of young European companies ready for stock market debuts, aiming to mobilize more equity capital.
2. Boujnah proposes further consolidation among market operators to counter the challenge posed by integrated American markets with large players and fat margins, emphasizing the need for consolidation in the defense and financial industries.
3. The EU's largest bank, BNP Paribas, faces a discrepancy in market capitalization compared to J.P. Morgan, the largest U.S. bank, leading Boujnah to argue for Europe to produce more European champions to remain relevant in the world, particularly in the financial market.
4. Boujnah believes technology promotion programs across European countries have cultivated an unprecedented number of young companies ready for the stock market, expecting IPO volume to surge in 2025 with companies vying for aggressive fundraising.
5. Recognizing Europe's overall weakness in lack of capital, primarily from private households, Boujnah advocates for a comprehensive reform of Europe's social security systems to direct household savings towards the capital markets, strengthening Europe's position in finance and business.

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