Ireland requires soul searching on attitude towards equity market – ISE CEO

  • Lack of public priority attached to growing businesses of scale
  • Irish market a compelling proposition for Irish enterprise
  • Government should follow lead of US and UK in implementing measures to promote companies growing scale

Ireland risks missing out on a substantial economic dividend from a generation of homegrown Irish business success stories in the absence of a clear national policy to support entrepreneurs and grow businesses to scale, the Irish Stock Exchange's Deirdre Somers said today.

Ms Somers said Ireland needs a similar initiative to recent US and UK government moves to encourage entrepreneurs to grow their companies and create the right environment for them.

“We need to have a joined up policy on enterprises as they grow from early stage, small companies,” said Ms Somers.

“There is a lack of public policy priority attached to growing enterprises to scale. We need to consider the real human, management, funding, cultural and taxation challenges faced by companies, their founders and their management”.

“Ireland is not the only country that requires soul-searching on our attitude to the equity market. In the US, an IPO taskforce was established and its findings implemented by President Obama in the recent US Jobs Act. The UK has also made changes to its tax policy to support entrepreneurs and grow their businesses to scale.

“The rationale is simple – IPOs and scale are a proxy for significant employment growth. At a time when unemployment is high, governments need to focus on supporting companies that can grow to scale – over 90% of employment growth takes place post-IPO. We need a similar initiative here”.

Ms Somers said the Irish equity market was a compelling proposition for Irish enterprise but that the economy needed to see more companies that are capable of becoming candidates for an IPO.

“We should be aiming for the growth of at least 5 to 10 companies with a market capitalisation over €1 billion the next 10 years”, she said.

“The State benefits hugely from the existence of the Irish market and the broader securities industry which cluster around it but there is no national policy on the development of the Irish market.

“We have development policies for cloud computing, digital games, the green economy and more but we are absolutely silent on how to leverage this important asset”.

Ms Somers also drew attention to the high level of stamp duty levied on trading in Irish shares and its impact on publicly-quoted Irish companies:

“Why is it that our authorities believe, and they are right, that the imposition of a financial transaction tax (FTT) would potentially lead to competitive issues for the IFSC and Ireland, and yet persist in believing that a tax of ten times that amount levied uniquely on the trading of shares of only Irish companies is consequence-free for Irish enterprise growth, funding, the Irish market and the Irish economy?”

Ms Somers was speaking at the Published Accounts Awards ceremony, hosted by the Leinster Society of Chartered Accountants.