Latvia’s Capital Market Activity Barometer 2025 Highlights Asymmetric Development: Strong in Bonds, Lagging in Equities

On March 25, Latvia’s leading investment bank Signet Bank, in cooperation with the national information agency LETA, presented the Latvia’s Capital Market Activity Barometer 2025 (hereinafter – the Barometer). Two reports have been prepared: the first covers the period from 2018 to 2024 and outlines the trajectory of market development, while the latest report analyzes the dynamics of 2025, when the capital market reached a higher level of maturity and achieved record-high results in the bond issuance segment.

The Barometer is the first analytical report of its kind in Latvia, combining both quantitative and qualitative data on capital market development and the role of participants – investors , entrepreneurs, policymakers, media, and society – in strengthening the Latvian economy. It provides a structured overview of market development trends, growth constraints, and the motivation to utilize capital market financial instruments.

Roberts Idelsons, Chairman of the Management Board of Signet Bank:

“Capital market development in Latvia reflects our collective ability to think more ambitiously about the future of the national economy. The progress achieved over the past five years has been significant – greater than is sometimes assumed when comparing Latvia to larger or more developed markets. Even a relatively modest increase in activity can have a meaningful impact on companies’ growth opportunities and the overall investment environment. With greater investor confidence, higher financial literacy, and more decisive business decisions, the capital market can become one of the most important growth drivers of Latvia’s economy.”

2025 Exceeded Forecasted Growth in the Bond Segment

Over the past year, capital market development largely aligned with expectations – the dynamics were positive, but primarily in the bond segment. Record-high results were achieved both in the volume of financing raised and in the number of transactions: EUR 1.5 billion was raised in Latvia through 32 transactions. The largest transaction of the year was the Latvenergo bond issuance totaling EUR 400 million.

For the capital market to have a greater impact on Latvia’s economy, the development of the equity market (IPO segment) is critical, where progress currently remains limited. There is a shortage of strong local company examples demonstrating the benefits of listing and helping to build broader understanding of the process. The absence of such examples slows both business decision-making and the development of financial literacy in this area.

“The role of the state in capital market development is essential. The Latvian government is the largest shareholder in the economy, managing a significant number of state-owned enterprises across various sectors. The experience of neighboring countries shows that listing state-owned companies on stock exchanges has served as a catalyst for market development, strengthening investor confidence and market activity. Latvia has not yet had a comparable example, and this affects the readiness of the private sector to make similar decisions. As a result, a circular dynamic emerges – the state does not set a strong precedent, the private sector remains cautious, and the equity market segment develops slowly,”

emphasizes R. Idelsons.

Latvia’s Capital Market Activity Barometer Reaches Record High

The Barometer closed 2025 at a record-high level, increasing by 12% year-over-year (YoY) to reach an index value of 226 (2018 = 100). Growth was driven by increasing investor activity and heightened visibility of capital market topics in the information space (+14% YoY), while total market volume increased by 5%.

Investor activity continues to grow both in terms of investment volume and the number of transactions. Market turnover increased by 24% YoY, while the number of transactions rose by 10%. This indicates that the average investment size per transaction is increasing, as individuals allocate more funds to investments and institutional investors become more actively engaged. At the same time, media interest in capital market topics remains high – the number of publications increased by 18% YoY, and audience reach grew by 11%.

However, development on the supply side of the market remains relatively slow. Although there were no IPOs on the Riga Stock Exchange during the year, rising share prices of existing listed companies contributed to a 10% YoY increase in total market capitalization. In the bond segment, total capitalization remained stable, increasing by 1% YoY.

Valters Smiltāns, Investment Analyst at Signet Bank:

“The conclusion remains unchanged from the previous year – investors are increasingly seeking investment opportunities in the local capital market, and raising capital is entirely feasible, as demonstrated by previous successful issuances. Demand in the local capital market is growing, and there is room for new participants.”

Capital Market Becomes More Accessible, While Understanding Remains the Key Challenge

The latest survey data[1] show that 44% of respondents have heard about capital market opportunities (a decrease of 7 percentage points), while the share of entrepreneurs who do not understand the capital market has increased to 30%, compared to 24% in 2025. This confirms that the primary barrier remains a lack of knowledge – 23% of entrepreneurs cite insufficient understanding of capital market opportunities.

At the same time, traditional barriers are gradually losing significance. Administrative burden is cited as a major challenge by 16%, costs and reluctance to disclose company information publicly by 16%, while only 7% believe that the capital market is too expensive. This suggests that, from a practical standpoint, the capital market is becoming more accessible as a financing instrument.

When considering future financing plans, entrepreneurs continue to focus on more traditional and familiar instruments. Government-supported financing tools dominate – ALTUM programs are cited by 70%, and EU programs by 44%. The use of capital market instruments remains more moderate: bond issuance – 27%, IPO – 26%, capital raising from investment funds – 35%. Overall, the data point to a structural trend — financing options in Latvia are expanding, yet in the perception of entrepreneurs, the capital market has not yet become a primary financing choice.

Media Coverage Concentrated Around a Limited Number of High-Visibility Projects

Media monitoring data[2] show that in 2025, capital market topics were mentioned in 13,950 publications in Latvian media, reaching a potential audience of 394 million, an increase of 13% compared to 2024. The most frequently mentioned topics were bonds, IPOs, and stock exchange listings.

In 2025, capital market coverage in the media remained concentrated around a limited number of companies and individual projects, particularly highlighting discussions about the potential listing of airBaltic, indicating that broader and more consistent policy or economic debate has yet to develop.

Ivars Svilāns, Head of Data Services Development at LETA:

“In 2025, capital market coverage in Latvian media developed as two parallel narratives – on the one hand, widespread but less visible corporate financing through bond and share issuances, and on the other, a highly concentrated and politically charged discussion about the potential listing of airBaltic.”

In the context of the capital market, media primarily fulfill the role of informer and watchdog, while efforts to promote public engagement and explain the personal relevance of the capital market remain limited.

Raivis Vilūns, media researcher and host of the program Future Capital, notes in his assessment of capital market framing:

“Latvian media present capital market content primarily from the perspective of companies and market mechanisms. Human stories appear rarely. As a result, a more distant, industry-focused framing emerges, which may discourage individuals less interested in financial matters and hinder the development of financial literacy.”

The experience of private investors appears relatively infrequently in media coverage, with publications more often focusing on systemic or institutional issues. Consequently, in the context of the capital market, media largely serve as informers and watchdogs, while public engagement and understanding of the capital market’s personal relevance remain limited.

The event also featured an industry expert panel discussion titled “Latvian Capital Market: Are All Market Participants Moving at the Same Pace and in the Same Direction?”, with participation from:

• Arvils Ašeradens, Minister of Finance of the Republic of Latvia
• Roberts Idelsons, CEO, Signet Bank
• Liene Dubava, Chairwoman of the Management Board, Nasdaq Riga
• Andris Grafs, Vice President of the Baltic Institute of Corporate Governance in Latvia
• Gundars Ruža, Member of the Management Board, LATRAPS

[1] Data were obtained from the “Financial Sentiment Survey of Latvian Entrepreneurs”, conducted in February 2026 by the research agency Mindshare Latvia. The survey included 505 business owners, executives, and chief financial officers, who provided their assessment of the current situation and development outlook for the 2025–2026 period.

^[2]LETA Analytics, in cooperation with Signet Bank, Capital Market Activity Barometer, 2025. Data source: STATION media monitoring; analysis period: 2025.