The past few months have been significant for Austrian exchange Wiener Börse’s attempts to position itself as the prime conduit for portfolio investment in central and eastern Europe. In a notable run it has managed to secure majority control of three exchanges in the region. Most recently, it signed an agreement in November to acquire a 92.4% stake in the Prague Stock Exchange, one of the largest in central and eastern Europe, with a market capitalization of about €40 billion.
The deal, which still requires final approval by the Czech central bank, marks a notable hat-trick for the Austrian bourse: it won a competitive tender to secure a 81.01% holding in the Ljubljana Stock Exchange in Slovenia in October, and in September increased its stake in the Budapest Stock Exchange to 50.43% following the acquisition of stakes held by three Austrian banks. In cooperation with Oesterreichische Kontrollbank, Wiener Börse now controls 68.798% of the Hungarian bourse, having taken an initial stake in the exchange in 2004.
As well as its acquisitions in the region, Wiener Börse cooperates closely with other central and eastern European exchanges, most notably Romania’s Bucharest Stock Exchange and the two Bosnian bourses in Sarajevo and Banja Luka.
Three-year wait
Commenting on the three acquisitions, Michael Buhl, Wiener Börse’s joint chief executive, tells Euromoney that it had been eyeing a stake in the Prague Stock Exchange for more than three years and that Wiener Börse’s initial interest in a minority stake prompted the owners to eventually opt for a tender to sell majority control. As part of the acquisition, Wiener Börse will also assume control of an energy trading exchange established last year and a clearing and settlements operation.
Buhl adds that despite the recent reversal in investor sentiment towards central and eastern Europe in the wake of the global credit crunch, Wiener Börse is confident about the long-term future for stock exchanges in the region. He acknowledges though that in the short term the environment for central and eastern European exchanges will be challenging. Although this year has been profitable for exchange operators in terms of revenues from heightened trading volumes, Buhl admits that with many investors having exited the markets this year, trading volumes next year are likely to be much lower. "We believe 2009 will be a difficult year in trading terms, but a good year for the integration." He adds that other exchanges in the region will watch how well Wiener Börse integrates its new acquisitions, and might look to sell stakes.