The AMF publishes a study on market-based financing in Paris for the period 2007–2025

The European initiative for the Savings and Investment Union aims to enhance the attractiveness and capacity of European financial markets to finance businesses. In this regard, the decline in the number of listed companies is a matter of growing concern for regulators. The development of private finance is indeed exerting increasingly fierce competition on stock markets. Furthermore, major European companies have recently opted for a primary listing abroad, particularly in the United States, where the recent upturn in the number of listed companies contrasts with the ongoing decline observed in most major European financial centres, such as London, Frankfurt and Paris. The aim of this study is to examine the long-term trends that have shaped the Paris stock market and to provide some points of comparison with other financial centres, particularly in Europe.

A limited renewal of listings on the Paris stock exchange

In less than twenty years, the regulated Euronext-Paris market has lost more than half of its listed companies, and since 2024, the number of companies listed on Euronext-Growth, the market dedicated to SMEs and growth stocks, has also been falling. This decline in the number of companies listed in Paris essentially reflects a drying up of initial public offerings (IPOs) since the subprime crisis, without French companies necessarily favouring a listing abroad. Transfers from growth markets to regulated markets have also dried up. Conversely, transfers of small-cap companies from Euronext-Paris to Euronext-Growth have increased, which does not appear to be detrimental to valuations or to companies’ ability to raise capital. However, these transfers have been accompanied by a significant decrease in the number of shares traded. In fact, the Euronext-Growth market for growth stocks appears, on the whole, to be better suited to SMEs in terms of the cost-benefit ratio of listing and the visibility of companies to investors.

Consequently, the Paris market is now more concentrated on large-cap stocks than it was in 2007, before the subprime crisis. Furthermore, it is struggling to attract foreign stocks, whose share of the market remains, as in Frankfurt, at low levels. Additionally, the financial profile of listed companies is, on the whole, more fragile than it was before the financial crisis (a trend that the Covid crisis and geopolitical tensions may have helped to exacerbate).  The profitability of listed companies in 2023 is lower than that observed in 2007, whilst the level of indebtedness, as measured by the debt-to-equity ratio, has increased for most listed companies, with the exception of mid-cap companies. Finally, whilst low-risk or no-risk companies dominate the financial market in both 2007 and 2023, the proportion of companies considered vulnerable or highly vulnerable is higher in 2023 than in 2007, particularly in Segment C and on Euronext Growth.

Market-based financing

Share issues by companies already listed in Paris have experienced relatively marked fluctuations since 2007, with peaks observed during major financial crises, notably in 2008, a year characterised by significant recapitalisation needs among large financial institutions. Issues involved a wide range of issuers of all sizes, with particularly heavy reliance on the market on Euronext-Growth. Finally, in recent years, capital raising has generally been driven by a need to strengthen companies’ equity and reduce their debt.

In a macro-financial environment characterised by particularly low interest rates, bond issues by French non-financial companies were buoyant throughout the period under review. Whilst bond issuance is widespread amongst companies, it is primarily used by large firms. For their part, SMEs and mid-cap companies increased their use of the market, at least up to 2017, particularly following Euronext’s launch of the IBO (Initial Bond Offering) initiative, designed to facilitate their access to the bond market, as well as the creation of bond funds specialising in SMEs and mid-cap companies, before this trend began to stall.