Stock exchanges: Vienna calls time on London


Guy Norton
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Austria’s Wiener Börse is looking to steal some of the London Stock Exchange’s thunder in 2008 and break its stranglehold on international equity issuance from central and eastern Europe.

Heinrich Schaller, Wiener Börse

"Many of the companies that have listed in London would have generated more press coverage by listing in Vienna"
Heinrich Schaller, Wiener Börse

With one or two exceptions, the LSE snaffled the lion’s share of initial public offerings from emerging Europe last year – including the $8 billion-plus offering from Russian commercial bank VTB. The UK bourse’s small-cap segment, the Alternative Investment Market, has also been a beneficiary of listings by companies from Kazakhstan, Russia and Ukraine, which accounted for the bulk of new issuance activity from emerging Europe in 2007.

Ironically, Vienna is looking to use London’s recent success against it, with Wiener Börse’s joint chief executive, Heinrich Schaller, arguing that the slew of listings in London has meant that in publicity terms the IPOs by central and eastern European firms have effectively cannibalized each other. "Many of the companies that have listed in London would have generated more press coverage by listing in Vienna," he says, adding that over the past year the Austrian exchange, with a roughly 30% increase in membership and a 50% increase in average monthly turnover – from €10.5 billion to €15 billion – has become a much more cosmopolitan and liquid trading venue than before.

"More than 50% of our trading members are now international investment banks and their share of turnover is increasing all the time," says Schaller. He adds that given the importance of central and eastern Europe to Austrian companies – more than 80% of Vienna-listed companies are active in the region – there is arguably a better understanding of the region in Vienna than in London.

At the same time as promoting Vienna as a potential primary listing destination in its own right, Wiener Börse is seeking to broaden its cooperation with other exchanges in the surrounding region, both through creating index products and promoting data vending services.

"We are interested in creating a regional market in central and eastern Europe, which will help to improve liquidity across all the markets" says Schaller, adding that Vienna’s vision includes the promotion of dual listings as well as the creation of common technology and trading platforms. "The aim of Wiener Börse over the last two or three years has been to cooperate rather than compete with other exchanges in central and eastern Europe," says Schaller. Wiener Börse already has index cooperation agreements in place with exchanges in Bosnia-Herzegovina, Bulgaria, Croatia, the former Yugoslav Republic of Macedonia, Montenegro, Serbia and Ukraine, with more than 80% of all structured products relating to central and eastern Europe based on indices created in Vienna.