Focus on ESG and sustainability accelerated in 2020

The number of companies covered is continuously growing as a consequence of Carnegie’s high market share in IPOs and in response to growing client demand for independent, well-informed and insightful analysis.

Despite a global pandemic that led to lockdowns in many countries and dramatic drops in GDP, the stock markets ended the year in the black, especially in the Nordic countries. The year was characterised by uncertainty, turbulence and volatility as well as the high number of companies that chose to strengthen their balance sheets with capital injections via private placements.

For the fourth consecutive year, institutional investors rank Carnegie highest in the Nordic market.

For the forth year running, Carnegie took first place in Prospera’s annual ranking. Carnegie was ranked the best adviser overall and in every sub-category, one being ESG research, which confirms the merit of the long-term initiative to integrate ESG in equity research. We were also number one in Nordic equities overall and in several sub-categories in the unified Extel/Institutional Investor Survey Europe.

Carnegie covers 360 companies, which is 93% of total Nordic market capitalisation.

Carnegie is the Nordic leader in equity sales and trading for institutions and offers the widest research capacity, especially in the small- and medium-cap segments. The position was solidified in 2020 and volumes increased in all segments, equities, DCM and ECM. Supported by Carnegie’s long-term and goal-oriented focus on wide-ranging expertise in Nordic research combined with wide expertise in brokerage, we were ready to meet the demand for services and advisory from our 1,000 institutional clients and our Private Banking clients. Our switch to a more digital approach during the year entailed further work to improve and develop the digital platform. In turn, this made it possible for us to improve the links between Securities operations in all offices, regardless of geographical location.

Increased income and operating profit

 On the strength of intense collaboration with corporate finance in relation to IPOs and other ECM transactions during the year, Carnegie maintained or advanced its market positions. Securities is reporting higher income and operating profit during the year. Carnegie has been dominant in block trading in shares in small- and medium-cap companies for a long time, and further increased its market share in 2020. Carnegie’s capacity to also provide liquidity in these shares in a volatile market delivered especially well in 2020.

In total, Carnegie covers more than 360 companies. The portfolio of covered companies includes the majority of all Nordic Large Cap and a very large number of small- and medium-cap companies. Research is a key cornerstone for both institutional and Private Banking clients. The number of companies covered is continuously growing as a consequence of Carnegie’s high market share in IPOs as well as in response to clients’ increasing demand for independent, well-informed and insightful analysis.

ESG – an integrated component of every analysis

Focus on ESG and sustainability accelerated in 2020 and is now an integrated and central component of all research. A large project was also completed to survey Nordic companies in preparation for the new EU Taxonomy and Carnegie published a taxonomy report during the year. The results of the analysis show that several companies that the market previously considered green did not perform as well, while others that had been overlooked suddenly became green darlings. This is due to the Taxonomy, which rewards companies that are investing in the green transition, meaning that these companies earn high scores through future-oriented initiatives.

Focus on ESG and sustainability accelerated in 2020 and is now an integrated and central component of all research.

For the second year running, Carnegie presented its annual Sustainability Award, which is based on the 360 companies covered by the Carnegie research team. The award is intended to put the spotlight on sustainability metrics that create shareholder value and present good examples to inspire companies and investors. First place in the Large Cap category went to Finnish Neste. Norwegian Scatec Solar won the Small Cap category and Swedish housing developer K2A was the Best Newcomer of the year.

Preparations for Brexit, the British withdrawal from the EU, were ongoing in 2020. Actions included relocation, until further notice, of teams that address various Continental European markets from London to Copenhagen. Exactly how Brexit will affect Securities operations will become clear when praxis and details surrounding the withdrawal fall into place in 2021, but our assessment is that the impact on Carnegie will be limited. The Merkur Market in Norway, operated by the Oslo Stock Exchange/Euronext, picked up speed with a high number of new listings and increased activity. Merkur also passed the milestone of NOK 100 billion in market value. Carnegie has reaped a large share of listings and trades on Merkur on the strength of its institutional network and its research capacity.

HENRIC FALKENBERG, HEAD OF SECURITIES

How does high stock market activity affect research?

We already deliver the most comprehensive research in the market and the number of companies we cover is constantly increasing, especially because with every IPO in which we act as an adviser, a new company is added, which we then continue to follow. The proportion of small- and medium-cap companies on the market is also increasing, and we have the strongest coverage in the market by far in that segment.

There is currently a debate in Europe on cutting the opening hours of stock exchanges. How would that affect Securities?

As long as everyone is playing on the same field and under the same conditions, there may be positive aspects. After all, it has been shown that liquidity in large cap companies is often concentrated to opening and closing. Shorter opening hours would most likely also make it easier for people to combine work and family life in our industry too