Hungary’s central bank eyes control of bourse, state company IPOs

By bne IntelliNews October 21, 2015

Hungary’s central bank wants to take control of the Budapest Stock Exchange (BSE) and list shares of state-owned companies on the bourse, Deputy Governor Laszlo Windisch suggested on October 21.

A deal could be good news for the BSE, which has endured a tough few years. It's few listings have proved far from successful listings, while it has seen a series of delistings, over the last few years. 

Turnover has also been steadily eroding. The average daily equity turnover on the bourse shrank 17.9% in 2014, to leave it at HUF7.8bn (€25.1mn). It is the lowest figure in the past nine years.

The Magyar Nemzeti Bank (MNB) currently owns a 6.9% stake in the stock exchange. Austria's CEE Stock Exchange Group controls a 50.5% stake and Oesterreichische Kontrollbank AG holds 18.3%. Last month, reports suggested the MNB is in talks with the Austrian owners in a bid to increase its stake.

The BSE can operate efficiently if the largest operators - issuers or investment service providers - take part in the management of the market as owners, Windisch told pro-government daily Magyar Idok. Several steps are needed to achieve that, he added.

The listing of state-owned companies and the launch of programmes aimed at helping smaller companies gain access to funding via the stock exchange are necessary, he said. Power company MVM, gambling firm Szerencsejatek, and MKB Bank have been mentioned as potential IPO candidates.

Until now, the poor relationship between the government and the bourse virtually ruled out the floatation of state-owned companies, analysts at suggest.

“In a best case scenario we should see more listed companies, increased interest by investors, higher turnover, and more analyst coverage”, they forecast. At the same time, negotiations on any deal would likely be difficult, the analysts add.

Related Articles

Azerbaijan's IBA sees assets fall 29% y/y in 2017 after debt restructuring

The assets of the International Bank of Azerbaijan (IBA), the largest lender in the country, contracted by 28.9% y/y to AZN8.7bn ($5.1bn) in 2017, the state-controlled bank reported on January 10. ... ... more

IMF sees economic recovery in Iranian non-oil sectors but urges shoring up of banking system

Iran’s economy is starting to recover more rapidly from years of international sanctions but the country urgently needs to shore up its banks, a senior International Monetary Fund official told ... more

Kazakhstan’s Bank of Astana SPO to be first ever placement of foreign bank on Moscow Stock Exchange

Kazakhstan’s Bank of Astana (Astana Banki) plans to conduct a secondary offering of shares (SPO) on the Moscow Stock Exchange, RNS news agency reported last week. Bidding will begin on December 14. ... more