Warsaw and Vienna bourses reportedly consider merged CEE hub

By bne IntelliNews April 10, 2013

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The creation of a Central and Eastern Europe stock trading hub is in the works as the Warsaw Stock Exchange - the biggest in the region - and the owner of the Vienna Stock Exchange, which has consolidated several Emerging European bourses over the years, are said to have discussed a merger.

The Vienna (VSE) and Warsaw exchanges (WSE) have discussed merging to create a CEE share trading hub, an unnamed source told Reuters on April 9. A combination of the two would bring together Central Europe's two biggest exchanges by the value of their listed companies. "Some talks were held. But these are very preliminary and may not necessarily lead to a deal," the source cautioned.

The WSE has pushed hard in the last few years to attract listing from across CEE. It has been particularly successful in grabbing business from the likes of Ukraine, where companies are eager to attract international capital without inviting Russian interest in themselves by heading to Moscow.

On top of a series of floats from domestic state companies, that tactic has seen the WSE maintain a steady stream of new listings over the last few years, and it's now the biggest bourse in CEE - home to 438 companies with a total market capitalisation of nearly PLN700bn (€170bn).

Meanwhile, CEE Stock Exchange Group - parent of the Vienna Stock Exchange - also controls the Hungarian, Czech and Slovenian bourses. It hosts companies with a combined market value of €129bn across the four exchanges.

Speaking at a conference on April 9, WSE board member Beata Jarosz said: "We are ready to seriously consider joining with pan-European consolidation process. In the future we want to have a partner from the region, from Europe. As far as today's information, I am not in a position to comment on it." A spokeswoman for the Austrian operator said the bourse was interested in some form of co-operation, but declined to elaborate.

The WSE is 35% owned by the Polish government, which has said it plans to unload that stake. However, while Warsaw is still in the drawn-out process of privatizing several state giants, it's likely to want to keep control of the bourse.

"At some time in the future... we will sell. We will fully privatise the Warsaw Stock Exchange," Deputy Treasury Minister Pawel Tamborski said at the same event as Jarosz. "When? How? These are very good questions, we still have all options open."

Tamborski added that Warsaw also wants to retain influence on the WSE to oversee the development of both the bourse and the country's capital markets. "The development of the capital markets in Poland is very high on the agenda of the government."

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