Small and medium enterprises are the backbone of many economies – also in Switzerland. To support their growth, SIX Swiss Exchange recently launched Sparks and welcomed Xlife Sciences as the first company in the new segment dedicated to SMEs. In an interview (see below), Christian Reuss, Head SIX Swiss Exchange, talks about the benefits of an IPO in general and a listing on Sparks in particular.
A listing enables companies to benefit from greater flexibility in optimizing their ownership structure, broaden their financing options and gain access to a broader investor base. In addition, going public increases the visibility of companies and strengthens their reputation, as they adhere to high regulatory standards.
Funding Growth More than Once
Looking beyond going public, Reuss points out the benefits of being public: “Usually everyone looks at the IPO and the initial funding for growth, but there are also follow-on offerings and this can also be used for growth or also to increase resilience.”
In 2020, companies in need of capital and were able to raise CHF 5.7 billion at SIX Swiss Exchange, highlighting how the exchange connects companies with the Swiss capital market and enables them to find financing in challenging times.
Opportunities to Invest in Fast-Growing SMEs
In the interview, Christian Reuss explains why the Sparks equity segment is not just attractive for companies, but also for investors looking for new opportunities. As it is a fully-regulated exchange segment – contrary to other growth markets and other jurisdictions in Europe –, full transparency and investor protection are ensured.
The high regulatory standards also mean that pension funds and other institutional investors have the liberty to invest in SMEs listed on Sparks, which should help to increase liquidity – usually a challenge in SME segments.
To further improve liquidity in Sparks, SIX Swiss Exchange has shortened trading hours: “We have a trading window lasting from 3 p.m. to the close, and here investors can come together in this condensed time frame and hopefully have the best possible price formation for these shares”, Christian Reuss comments.
Switzerland: A Good Place to Invest in SMEs
Switzerland provides a combination of interesting factors. It’s a stable economic environment and has a strong currency, there is a dedication to quality and a proven track record in innovation. All that is coupled with about USD 7 trillion in assets under management, providing excellent opportunities to fund growth.
The interview with Christian Reuss was lead by Tanya König from finance.swiss, a platform that brings together the latest information on the Swiss financial centre. It is part of the Swiss federal government’s policy for an internationally competitive financial centre and broadly supported by the Swiss Confederation and the financial sector.