Monday, June 30, 2008

Ex-director: Brokerage industry to suffer from bourse takeover.

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Ex-director: Brokerage industry to suffer from bourse takeover. The business of brokerage houses was likely to be severely affected by the entry of the Vienna Stock Exchange as a majority shareholder in the Budapest Stock Exchange (BSE), ex-BSE chairman Attila Szalay-Berezviczy projected, cited by daily Nepszabadsag . He argued that in such a case the Vienna bourse could decide to link its trading platform with the BSE’s trading platform. Such a move could stimulate London investment banks to transfer their deals to the Vienna bourse, in which they were full members. Currently, the investment banks accounted for the predominant share of trading on the BSE and their transactions were carried out by Hungarian brokerages. Their withdrawal from the BSE market could thus strongly limit the turnover of the brokerage houses as Szalay-Berezviczy argued that the remaining trading volume would not be sufficient to sustain the current size of the industry. In addition, he estimated that the loss of transaction fees would lead to a HUF 10bn reduction in budget revenues from taxes on the transactions. Accordingly, Szalay-Berezviczy called on local players to join efforts for the establishment of an alternative bourse to the BSE in case of integration of its platform with the Vienna bourse trading system. As we reported, UniCredit Bank Hungary and Raiffeisen Hungary has both agreed to sell their stakes in the BSE to the Vienna Stock Exchange. The latter could thus boost its holdings in the BSE to 68.8% if it buys out stakes from other members of the Austrian banks’ consortium, which currently controls the bourse.

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Ex-director: Brokerage industry to suffer from bourse takeover.

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