The recent decision by airline software provider Datalex to delist from the Irish stock exchange, Euronext Dublin, marks yet another significant setback for the viability of Ireland’s public equity market. This move underscores a worrying trend that has seen a consistent exodus of prominent companies, raising serious questions about the future of domestic capital formation.
Datalex joins a growing list of entities, including global powerhouses like CRH, Smurfit Kappa, and Flutter, as well as struggling startups and private acquisitions, that have departed Euronext Dublin. The alarming upshot is that Irish companies are increasingly unable to fully capitalize on growth opportunities at home, often leading to sales to foreign buyers or early departures from the market. For many, pursuing an Irish IPO no longer appears to be a viable or attractive option for the nation’s most promising new generation of businesses.
This critical juncture in the Irish financial market stems from a confluence of factors, including long-standing neglect, a palpable lack of courage, demonstrable incompetence, and a degree of greed within key institutions. The Department of Finance, the stockbroking community, and the exchange itself all share responsibility for the current predicament, each having contributed to the erosion of confidence and capability in the equity capital ecosystem.
For many years, the Department of Finance has displayed an inexplicable lack of interest in the Irish stock exchange. Whether rooted in ideological reluctance or a perceived lack of political appetite to bolster a symbol of capitalism, the department has consistently failed to seize the initiative in fostering a robust domestic equity market, thereby allowing the current challenges to fester and intensify.
However, the problems extend beyond government policy; the stockbroking sector also bears significant blame. In the early 2000s, many brokers shifted their focus almost exclusively to servicing large companies that generated substantial fees through major equity offerings. As this traditional business model waned, these firms largely failed to develop new pipelines or adapt to the evolving needs of smaller, growth-oriented companies, leaving a critical void in the market’s support infrastructure.
Furthermore, the sale of the Irish Stock Exchange (ISE) to Euronext in 2018 for €137 million, while celebrated at the time, is now viewed by many as a missed opportunity born of a reactive, rather than proactive, strategy by its previous owners. Critics argue that instead of passively waiting to be acquired, the brokers who owned the ISE should have actively sought to revitalize and market the exchange itself, transforming it into a dynamic hub for investment and corporate finance.
Euronext Dublin has recently made commendable efforts to address these issues, submitting a comprehensive proposal to the government that advocates for crucial reforms such as stamp duty adjustments, retail investment incentives, and the establishment of demand support structures like an equity anchor fund—strategies successfully deployed in countries like Sweden decades ago. It is imperative that the government listens to these proposals and acts decisively to implement policies that can reinvigorate the Irish equity landscape.
Beyond regulatory reform, the exchange itself must significantly enhance its appeal and engagement with entrepreneurs. The concept of an IPO in Ireland has become so distant from the minds of many emerging businesses that tax and demand-based initiatives alone will likely be insufficient. A concerted effort is required to actively persuade and encourage these companies to embrace the leap onto the domestic public market, fostering a renewed culture of local equity investment and growth.
