A new SME stock savings account to boost the small- and mid-cap segment
A boost for small and medium-sized companies: this is the goal for the new SME stock saving accounts (PEA PME) that will be launched in France at the beginning of this year. Benefiting from the same tax advantages as traditional stock saving accounts (PEA), this new form of saving accounts must have 75% of securities being SMEs, half in stock, without exceeding €75,000. Eligible companies will be those with fewer than 5,000 employees and a turnover of less than €1.5 billion, or total assets inferior to €2 billion. Professionals estimate that this new product will be able to attract one to two billion euros – a most welcomed addition of financing for small and medium-sized companies that sometimes might struggle to get enough support.
Asset managers show strong interest for these new saving accounts. “This innovation expands the investment radar in favour of small and medium-sized companies,” says Diane Bruno, manager at Mandarine Gestion. “By offering a new opportunity for tax savings, the PEA PME could interest people whose existing stock account has capped out.” Investing in PEA PME would not lead to sacrifice any performance. “Small and mid-caps have been outperforming structurally since 2000”, notes Diane Bruno. A large majority of management companies are therefore expected to create funds that qualify for this new PEA.
To assist the Management companies, Euronext is preparing to launch a PEA PME index developed together with Société Générale. “We very much want to support the small and mid-cap compartment. Our initiative will supplement and buttress EnterNext’s efforts in this area”, says George Patterson, Euronext index manager. “Creating a benchmark will support this listing segment, as well as respond to a demand from professionals.” This index, initially limited to France and containing around forty securities, will meet PEA PME eligibility criteria as well as its liquidity criteria, with a required minimum of €250,000 in daily transactions. Further on, a pan-European index is in the pipeline.
Renewed strength of the Parisian markets in 2013
Euronext Paris played a major role in financing the French economy in 2013. Companies listed on our markets raised €64.3 billion last year, including €10.5 billion in equity and €53.7 billion in bonds. Moreover, unlisted companies also benefited from Euronext’s dynamism and listed numerous bond issues on our markets.
A total of 26 companies entered Euronext or Alternext Paris, compared with 19 in 2012 (+37%), representing an additional market capitalization of €80 billion, with €72bn coming from cross-Atlantic dual listings of Infosys and Eli Lilly. Around 20 of these operations were accompanied by public offers raising a total of €1.3 billion (a growth rate of more than 400% compared to 2012). One of these issuers was Cardio 3 Biosciences that became the first company to successfully list and raise money in Paris and Brussels simultaneously.
The three largest primary capital raisings on Euronext were Numéricable (€750 million), Tarkett (€462 million) and Blue Solutions (€42 million), all three taking place in the fourth quarter. On Alternext, the largest operations were Figeac Aero (€18 million), Carbios (€13 million) and Spineguard (€8 million) and Spineway (€5 million).
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