Reverse merger creates big share price jump for Swedish birthing aid company

October 24, 2022
Kapital Partner

October 24, 2022
Kapital Partner

Positive sentiment on the Nordic growth exchanges where several companies made comebacks.

Shares on the Nordic growth exchanges (Kapital Partner Nordic Growth Exchanges Index/ KPNGX) rose 0.7% last week. By comparison, the Swedish S30 index rose 1.7% while the Danish C25 index fell 0.2%. Reverse mergers are again where the biggest returns can be had – closer to 165%. There are many potential buyers in Sweden in particular, so it is worth keeping an eye on them.

Since 1 January 2020, both the KPNGX index and the Thomson Reuters Venture Capital Index have fallen about 6-11%. The development of Nordic growth exchanges thus roughly corresponds to the development of the venture sector. Year to date, the KPNGX index has fallen 45%, while the Thomson Reuters Venture Capital Index has fallen 55%.

KPNGX index development since 01.01.2020

**The KPNGX index consists of all listed companies on the Nordic growth exchanges, including Nasdaq First North Growth Market, Spotlight Stock Market and EuroNext Growth.**

The Nordic sentiment

Although the Nordic emerging stock markets showed positive price development overall, there were more companies with negative price development than stocks with positive development. Thus, the arrow turned downwards for 397 out of 908 stocks last week. On First North Denmark, the same trend was true, with 21 out of 51 stocks falling, and of the 293 Nordic healthcare stocks, 140 had a negative week.

The positive percentage shows the proportion of companies within the indices that delivered a positive return during the week.

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Sector development the past week

Energy and Industrials fared best during the week with gains of 2.3% and 2.2% respectively, while Healthcare and Real Estate also gained. Utilities fared the worst with a fall of 2.5%. Year to date, however, the Energy sector has fared best in the wake of the energy crisis with a fall of 8.3%, while Healthcare has fallen the most with -48%.

The 3 best performing stocks on the Nordic growth exchanges last week

ObsteCare AB (+165%) develops solutions for obstetric care, including birth monitoring, measurement and analysis, and related training packages.

The company last week entered into a non-binding agreement regarding a so-called “reverse takeover”, where ObsteCare AB technically buys Myfirstapp Group, but pays for the company via shares in ObsteCare AB, making Myfirstapp Group the majority owner of the listed company. ObsteCare AB has a market capitalisation of SEK 5.5 million and the share price has fallen 81% year to date. Last week ObsteCare AB was the worst performing Nordic healthcare stock, while last week it rose to the top – it can go that fast.

Share price development of ObsteCare AB year to date

EKOBOT AB (+116%) is an innovative robotics company that has developed an agricultural robot focusing on weed control of crops that require a high degree of precision and where the use of robots offers a large cost saving of up to 20%. The company is currently in the commercialisation phase, where further sales could form the basis for new market opportunities.

Last week EKOBOT AB announced the results of the company’s subscription options (TO2) at 2.57 per share, which were exercised 47% and raised the company SEK 700,000. This weekend, EKOBOT received an additional SEK 2.4 million at price 5 from Navus Ventures to support the commercial rollout of EKOBOT’s agricultural robots. The company has a market capitalisation of 20MSEK and the share price has fallen 74% year to date.

Share price development of EKOBOT AB year to date

Igrene AB (+93%) operates in gas and oil. The majority of the business is currently located in northern Sweden and the company is active in the entire exploration chain, from inspection, soil testing, core drilling, sampling to full-scale testing.

The company rose last week after it announced that it is investigating the conditions for producing hydrogen from the natural gas in its Mora field. The company has a market capitalisation of 31MSEK, and the share price has fallen 26% since the start of the year.

Share price development of IgreneAB year to date

Developments during the week on First North Denmark

The Kapital Partner First North Danmark (KPFNDK) index rose 0.7% last week. The KPFNDK index is one of the best performing stock indices in the Nordic region year to date with -21% compared to KPNGX (-45%) and C25 (-24%). As can be seen from the graph, the performance of First North Denmark, the Nordic growth stock exchanges and the venture index is broadly similar since 1 January 2020 – albeit negative in the 6-15% range.

KPFNDK index development since 01.01.2020

^{KPNFNDK-index consists of all stocks on Nasdaq First North Denmark}

Developments during the week on First North Denmark at company level

Nexcom A/S was the winner of the week with an increase of 25%. Decideact A/S followed with a 23% increase. The two companies have had negative returns year to date in the 34-36% range. Copyright Agent A/S, on the other hand, was the worst performing stock of the week with -21%, and is also the worst performing stock on First North Denmark this year with a fall of 79%, followed by LED iBOND International A/S.

Development on First North Denmark last week and year to date

The x-axis shows the percentage change over the past week, while the y-axis shows the percentage change year to date.

Best performing stock of the week on First North Denmark: Nexcom A/S

Nexcom A/S (25%) develops automated systems for handling customer inquiries via e.g. telephone or e-mail – from the actual contact with the customers to the execution of the customer wishes and orders. Nexcom supplies such IT systems to B2C companies in particular, within telephony, insurance, energy and property management. Customers are from Scandinavia, Europe and North America and include Telenor in Denmark and the USA, Telia in Denmark, Norway and Lithuania, and Groupon, RealPage and Lash in the USA.

The company has a market capitalisation of 35MDKK and the share price has fallen 34% year to date.

View the investment case for Nexcom A/S here

Price chart of Nexcom A/S year to date

Developments during the week for the Nordic healthcare stocks

Nordic healthcare stocks (Kapital Partner Healthcare Index/KPHC) have really taken a beating in 2022, falling around 49%. Last week, the KPHC index fell 0.1%, with the aforementioned ObsteCare AB (165%) making up the top 3 along with Redwood Pharma AB (30%) and Ectin Research AB (27%). Diagonal Bio AB fared worst, falling 58%. Last week’s worst-performing healthcare stock was ObsteCare AB, which this week is the most upbeat across the emerging markets testifying to great volatility among healthcare stocks.

KPHC index development since 01.01.2020

The KPHC-index consists of all healthcare stocks in the Nordics.

Disclaimer

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