Lago Kapital adds Nordic conglomerate to its automated liquidity service
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Lago Kapital adds Nordic conglomerate to its automated liquidity service 23 September 2019Helsinki Reporter: Maddie Saghir
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Boutique securities lending firm Lago Kapital has signed a market making agreement with Northern European conglomerate Aspo, which will switch from its current liquidity provider, Nordea Bank, next month.
The market-making agreement aims at increasing the share's liquidity and decreasing the share price volatility in order to facilitate trading for private investors.
Aspo has terminated its agreement with Nordea Bank, which will end on 18 October, and will begin its contract with Lago on 21 October.
Under the agreement, Lago will provide Aspo shares with bids and offers so that the maximum spread is 3 percent, as calculated from the bid quotation.
Both bid and offer sides include a number of shares corresponding to a value of at least €3,000.
The agreement is in force for a fixed three month period and will continue until terminated with one month's notice.
The agreement follows the liquidity providing requirements issued by Nasdaq Helsinki.
Commenting on the latest mandate win, Lago’s CEO and founding partner Jarkko Järvitalo said: “Our service has been very well received in the market and during 2019 every single new liquidity providing (LP) agreement in Finland was won by Lago.”
Järvitalo added that he believes Lago’s success is due to the fact that its service is fully automated and offers a high level of performance transparency in the form of monthly reports.
Lago has been offering LP services for listed companies since 2018 in both Finland and Sweden and is looking into expanding into the Danish market by the end of 2019.
Earlier this year, Aallon Group Oyj signed up to Lago’s liquidity programme, and Lago explained that its wide network of lenders enables it to have more flexibility with securities lending on the back of any possible short positions providing liquidity.
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