00:00First of all, how is Europe doing in terms of listings in general?
00:04There seems to be this proxy fight between Europe and the U.S. in terms of capital attraction.
00:09Who's winning?
00:10Well, on the IPO side, it's clear that the beginning of the year is amazing.
00:15I mean, as you've just mentioned it, Czechoslovak CSG Group has launched its IPO last week in Amsterdam
00:23on Euronex for something like a $25 billion market cap.
00:27Today, it's more than $30 billion.
00:30There is $3.8 billion.
00:31I mean, we are starting the year with a lot of energy.
00:35We have around the corner the IPO of K&DS, the Franco-German military equipment manufacturer.
00:44So on the defense and aerospace sector, clearly there is a strong momentum.
00:49Kornsberg in Norway is going to organize the IPO of the maritime division.
00:54And we have more of these aerospace and defense companies in the pipeline.
00:59So I believe 26 will be a great year for Europe.
01:01So do you think Euronex is actually presenting itself almost as a hub for defense company listings?
01:07Yeah, we have been committed to what I call the new ESG, energy security geostrategy,
01:11to various products with specialized defense bond segment, with IPO-ready programs for non-listed aerospace and defense companies.
01:21Because on defense and aerospace, Europe needs speed and scale.
01:26And scale requires consolidation and requires access to global markets.
01:31Are you doing anything specifically to encourage these listings in Europe?
01:35Absolutely, absolutely. We have a dedicated room.
01:38We have a fundamental vertical for aerospace and defense that starts with non-listed companies,
01:43with helping them to raise equity funding when they are not listed,
01:46through helping them raising debt, helping them getting access to public markets,
01:51and making through all sorts of indices to what I call new ESG, energy security geostrategy index,
01:58getting more visibility to those companies.
02:01So we mentioned, of course, CSG as Euronex's first big listing of the year.
02:05What else is to come? Are you expecting more bigger IPOs of that size?
02:09Absolutely. I mean, not necessarily of that size, but clearly in the aerospace and defense sector,
02:14we are expecting a sustained flow because those companies...
02:17How many? Like 10, 15?
02:19No, I don't want to make numbers. I've mentioned the ones for whom the decision is already public.
02:23I mean, the companies themselves make public their plans,
02:27but I can tell you that the pipeline on aerospace and defense is unprecedented.
02:32What went wrong last year? Why were there no big IPOs?
02:35I think when markets are too volatile, when markets are uncertain, people don't take the boat.
02:44You need enough volatility for volumes to be there,
02:48but you can't stand extreme volatility if you want to go public.
02:53What is true, though, is that there is a new interest for Europe from the rest of the world and from U.S. investors.
03:00U.S. investors and the rest of the world find valuation in Europe cheap
03:04and not necessarily justified by the gap between growth prospects in the U.S. and in Europe.
03:10Second, they find the U.S. a scary environment, unpredictable,
03:15with too much volatility on decision making,
03:18too much uncertainty on world of law,
03:20too much uncertainty on tariff, too much uncertainty on interest rate,
03:24too much uncertainty on inflation,
03:25too much uncertainty on fairness of business relationships.
03:30So people around the world, in particular in Asia and in the Gulf,
03:34say, whoa, whoa, whoa, let's diversify away from the U.S. risk
03:38because the U.S. is not what it used to be.
03:40So the rest of the world is mourning and grieving the U.S.
03:45because the U.S. is not recognizable.
03:47And therefore, we see for real, and asset managers can confirm that,
03:52a new flow of money from the rest of the world looking at Europe differently
03:57as maybe lower return than some emerging markets, but lower risk as well.
04:03Stéphane, do you actually have numbers for that?
04:04Because, you know, because of the Magic 7 or the Magnificent 7 in the U.S.,
04:08actually valuations are pretty strong in the U.S.
04:11Well, if you do, what you have to do is to neutralize U.S. markets from the Magnificent 7
04:16because the Magnificent 7 are great companies,
04:19but they are, in fact, global tax collectors.
04:22They have a price-making position that allows them to be in a different league.
04:30And therefore, if you neutralize the U.S. market from those seven companies,
04:36and when you compare performance of the rest of the U.S. list with Europe,
04:40when you look at the gap in valuation, and when you look at how investors behave,
04:45you can look at, beyond valuation, fundamental moves in terms of flows of investment of money
04:54from the rest of the world and from the U.S. that look at Europe differently.
04:58Because there are, in average, European companies are much more global
05:02and are capturing much more of the diversified growth across the planet
05:06than companies of the same size in the U.S. that usually are more local.
05:09Yes, but if they're very exposed to Europe, there's, you know, concerns about competition.
05:14I mean, this is what I hear from everyone, is that Europe needs to get back.
05:18No, but what I'm trying to underline is that large European companies
05:22are much less exposed to their domestic markets and the European markets
05:26than large global companies in the U.S. are exposed to the U.S. dynamic.
05:30Large European companies are global companies because they have to do it to survive.
05:36Look at some great countries like Italy that has a massive and amazing commercial export surplus.
05:44So that's the strength of European companies.
05:47They are global and that's why they are attracting more appetite from global investors,
05:52in particular those days where everyone is in a pause mode vis-Ã -vis what is happening in the U.S.,
05:58which is like mourning or grieving.
06:00You are shocked, you are in a state of denial, sadness, anger, and then hopefully acceptance and reconstruction.
06:10But really, people are in a state of mind where they don't know what to do with the current U.S. environment.
06:17You've just completed the acquisition of the Athens Stock Exchange.
06:20What's next on your list?
06:21Well, Euronext is an open house for consolidation of European players.
06:26We are more than enthusiastic if we are approached by anyone who wants to join our open project.
06:33Euronext is the living proof that either we succeed together or we fail separately.
06:38And what we have built, a single liquidity pool, a single order book, an equity market,
06:42which is now twice the size of the London equity market.
06:44Every day we trade €12 to €13 billion of volumes, which is more than twice the size of the equity market in London.
06:52So this is the place to be for the ones who want to build European strategic autonomy.
06:57You're very optimistic about Europe, which is great to hear.
07:00But is there anything that frustrates you?
07:02Is it regulation?
07:03Is it something that's slow?
07:05What could we do better?
07:06Europe needs speed and scale.
07:09And we need to revisit completely a framework in particular on antitrust that was invented in the 50s, in the 60s, in the 80s,
07:19when China was not a superpower and when the U.S. was a fundamental partner to Europe.
07:25In a situation where we get to a new world, where China is here and where the U.S. is not necessarily a structural partner,
07:35then we need to have a different approach of consolidation.
07:38Europe needs speed and scale.
07:39To get speed, you need to invent shortcuts.
07:42And to get scale, you need to accept consolidation and creation of European champions.
07:46I mean, last year there was a lot of talk about this unified European exchange.
07:49Did anyone, any government or the commission come and talk to you about it?
07:53No, there are talks.
07:54I mean, a few days ago there was a meeting between the French Minister of Finance and the German Minister of Finance
08:00where they shared views about what they can do to create more liquidity for scale-ups in Europe.
08:05And they shared ambition that one day we can build something together.
08:09So there is clearly an appetite and interest at the government or leaders' level to make things happen.
08:16Now, this is one thing.
08:18The other aspect is whether the corporates themselves who run the assets, who own the assets,
08:23are willing to embark into this type of consolidation.
08:25As far as Euronex is concerned, the purpose of Euronex is to be an open vehicle
08:31to create the strategic autonomy of Europe and to make Europe strong when it comes to financial markets.
Comments