The forthcoming merger "of equals" of the Frankfurt Stock Exchange (which in 2011 attempted a merger with the NYSE blocked by the European Commission) with the London Stock Exchange in London raises a question: does it still make economic and financial sense to keep the peripheral operational? and asphyxiated Milan Stock Exchange? Also not to forget that when (2007) the Milan Stock Exchange was incorporated into the LSE, exchanges halved between 2007 and 2008, migrating to other trading platforms. Will this happen again with the LSE merger with Frankfurt?
The marginality of the Italian stock exchange and the scarce informative efficacy of the prices that are formed there have always been known in comparison with those of EU countries with economies similar to the Italian one. Marginality that was not exceeded even from the start, in the distant years 1992-93, of the concentration of trading on the stock exchange, when the number of companies admitted to stock exchange listing was just around 230, and as desired by the economic policy for the strengthening of the capital market which led to the enactment of the Consolidated Law on Finance in 1998. A quarter of a century since then, the data published by the FESE- Federation of European Stock Exchanges confirm the persistence of this marginality in an incontrovertible way: in 2015 against slightly less of 300 companies listed on the Milan MTA, Paris was listed over a thousand and Frankfurt over 650. For its part, the LSE listed over 2300 companies. It should be added, to complete the judgment, that the marginality and lack of attractiveness of the Italian stock exchange with respect to other financial centers is also marked by the absence of foreign companies listed there.
Also in terms of market capitalization the comparison does not change sign: in 1997 the Deutsche Borsa showed a market capitalization of 2,4 times that of Italy, that of Amsterdam 1,4 times; Paris by 1,9 times; Euronext by 3,8 times; LSE by 5,9 times. The Madrid Stock Exchange alone was 0,8 times that of Milan (see, www.FESE, Monthly statistics; www.Borsa Italiana, statistical series). A quarter of a century later (2014), the capitalization of the Milan stock exchange stood at 30 per cent of GDP, once again placing itself among the most modest in the EU. In fact, in the same year, the Madrid stock exchange also surpassed the Italian stock exchange with a stock market capitalization 1,5 times higher; the Deutsche Bor-se by 2,7 times; Euronext by 5,3 times; the NASDAQ Nordics & Baltics 1,9 times; the Swiss Exchange 2,4 times (FESE data). Consequently, Italy's marginality in relation to venture capital funds still does not allow it to belong to the group of eight member states (United Kingdom, Germany, Sweden, Denmark, Finland, the Netherlands, France and Spain) which hold around 90 per cent of these funds (data from the EC, Green Paper. Building a capital markets union, Brussels, 18.2. 2015).
For its part, the unstoppable process of technological innovation contributes to the marginality of the exchanges that take place on the Italian regulated markets. In fact, the share of trading conducted on domestic regulated markets is only around 52 per cent; around 16 per cent on regulated foreign platforms, around 30 per cent on unregulated markets (Over the counter) (Consob data).
In such a context, which documents the pathological lack not of demand, but of supply of securities representative of risk capital, it could be convenient for Italian companies listed on the modest and peripheral Italian stock exchange to migrate to European trading platforms (Euronext and Deutsche Borsa , London Stock Exchange) more liquid, thicker and extended over a greater range of securities traded, taking the advantage of the greater information effectiveness of the prices of the securities traded, which are more significant than the economic and financial situation of the issuer. These prices, in turn, would be more representative of the market value of the firm itself. This would hopefully be the case in the case of the market value of the numerous banks listed on the Italian stock exchange which could thus free themselves from the rhetoric of the pernicious link with the territory.
In conclusion, anyone who observes the operation of the Milan stock exchange cannot but recall what JM Keynes wrote in the General Theory of 1936, namely that "It is generally agreed that casinos", in name of the public interest, should be made inaccessible and very expensive. And this also applies to Stock Exchanges” (JM Keynes, The General Theory of Employment, Interest and Money, MacMillan, p.159).
