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New Strategy To Boost Vienna Stock Exchange As European Hub

Date 01/06/2017

  • Management to boost VSE's international standing by expanding product offering and intensifying global marketing 
  • Key strength - 75% market share for Austrian stocks trading – to be capitalized on; role as technology & data provider to be further scaled up
  • VSE as one-stop shop for foreign stocks traded in Austria: US stock trading launched today, other foreign stocks to follow

The Vienna Stock Exchange is strengthening the domestic financial market by expanding the range of trading products and boosting the global marketing of Austrian stocks and exchange services. “Our motto is: the world for Austria, Austria for the world. We are aiming to raise the profile of the Vienna Stock Exchange as an important hub in the European capital market landscape. On one hand, we will intensify the international marketing of Austrian stocks and services provided by the Vienna Stock Exchange. At the same time, we are significantly augmenting our offering for Austrian investors,” stated Christoph Boschan, CEO of the Vienna Stock Exchange, explaining the exchange’s strategy ahead of the Vienna Stock Exchange Award Event. In Austria, the exchange seeks to raise awareness among investors, policymakers and companies of the benefits of the stock market by promoting financial literacy and adopting a modern information policy.

Heimo Scheuch, Chairman of the Supervisory Board of Wiener Börse AG stressed the importance of an independent and strong home market. He speaks from many years of experience as CEO of Wienerberger AG, one of the oldest exchange-listed companies in Austria, whose stocks are held 100% in free float. “The stock exchange is a critical part of a vibrant, well-functioning business ecosystem. Access to capital markets makes companies fit for the future. Austria is well advised to promote and expand this. And with a view to securing Austria's standing as a business location – catchword headquarters – and future jobs, I actively support a strong domestic stock market.“

Wiener Börse AG, the company: Solid foundation for future development

To sharpen the brand and expand its positioning, the Vienna Stock Exchange analyzed its current market position. One of its key strengths is stock trading, which is also the main line of business and accounts for around half of the company's revenues. With a share of 75% of the market for Austrian stocks, the Vienna Stock Exchange is also a clear market leader and able to prominently showcase domestic listed companies internationally. Further important business areas are the central market data feed for CEE and the calculation of more than 130 indices. As a technical services provider, the company will soon be operating five stock exchanges and will be providing IT services to numerous financial institutions in the CEE region.

Christoph Boschan explains: “With our market position in trading in domestic stocks, we are exceptionally competitive for a national stock exchange. Our analysis clearly shows that we are in a position to engage in substantially developing our current business areas over the coming years. Evolution rather than revolution is therefore the strategic approach of the Vienna Stock Exchange.”

Austria for the world: Expansion of global sales

Targeted global sales activities and new initiatives will help boost turnover by a projected 30% at Wiener Börse AG over the next few years. Today, some 4/5 of Wiener Börse AG's turnover is generated from abroad. The stock exchange intends to build on this and increase its international activities to better exploit this potential. “We want to grow in all business areas: in stock trading, in data vending, index calculation and IT services,” explained Boschan. “We are concentrating on enlarging our global sales and are currently intensifying efforts in this area. As a company, we are aiming for much higher revenues through these activities. As a business location, Austria and its listed companies will benefit from wider recognition on world markets.”

The world for Austria: Trading without borders for domestic investors

Currently, Austrian investors invest a large share of their portfolio in foreign stocks. The Vienna Stock Exchange plans to target these investors and offer them services as a one-stop-shop. With this in mind, it will immediately start expanding its range of products. The first new product was launched today: trading in major US stocks through the Vienna Stock Exchange. Trading and settlement will be in EUR at domestic fees. A Market maker ensures attractive prices and liquidity by entering binding quotes. Christoph Boschan: “In line with the motto ‘Invest global, buy local’ we want to bring the world to Austria for our domestic investors. With our new product, they can benefit on several fronts. Investors can trade at our quality standards, during our trading hours and without the higher foreign fees. We will soon be offering additional products, therefore expanding the quotation list of the Vienna Stock Exchange,” said Christoph Boschan.

Financial Literacy: Strengthen awareness for stock markets

The framework conditions on the Austrian financial market are also a priority for the stock exchange. “We have a clear plan for our listed companies despite the lack of regulatory support, a stagnant market and limited economies of scale. The purpose of domestic regulatory policy is to keep our business location competitive and well-prepared for the future,” explained Boschan. “To this end, we need a policy plan for the development of the domestic capital market. The mission statement “we are an exchange-listed company” needs urgent reinforcement. To this end, we are engaged in ongoing talks with political decision-makers. At the top of the agenda is the market for SMEs that needs to be opened up again through a policy change.”

“Policy-makers must fulfill their responsibility for the development of the capital market. This means: ensuring clearly-defined areas of competence; no isolated moves by Austria or regulations that are not common practice internationally. There is also a lot of fine-tuning that can be done in the area of taxation to encourage growth,” added Scheuch. With regulatory support and all market participants pulling in the same direction, it will be possible to set things in motion. This was evident in the recent joint initiative to advance employee participation schemes. Scheuch confirmed that the “Minister of Finance Schelling made a good proposal in this context. Wienerberger and other major companies supported the idea. Stocks help create jobs and added value, and every employee profits doubly from this.”

Christoph Boschan stressed: “Every single one of us can participate in the entrepreneurial performance of the country through stock investments”. One euro invested in an exchange-listed company generates EUR 2.3 for the domestic economy. Over 400,000 jobs – that is every eleventh job – depend on an exchange-listed company. “The capital market strengthens our country as a business location and our innovation capacity. We are working proactively and intensely to heighten awareness of this, which will stimulate the Austrian economy more broadly,” said Boschan in his closing statement.