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- The second Three Seas Stock Exchanges Conference took place in Warsaw on 7-8 October 2021 as part of the celebrations of the 30th anniversary of the Warsaw Stock Exchange (GPW)
- The event brought together Polish authorities and European institutions, Three Seas Exchanges CEOs and companies participating in the CEEplus index
- The second day of the Conference was dedicated to discussing the co-operation in the Three Seas Exchanges Initiative
- President of Poland Andrzej Duda is the honorary patron of GPW’s 30th anniversary
The second day of the Second Three Seas Stock Exchanges Conference, a highlight of the celebrations of the 30th anniversary of the Warsaw Stock Exchange (GPW), was dedicated to discussing the co-operation in the Three Seas Stock Exchanges Initiative, of which GPW is a co-founder. The key objective of the Initiative is to enhance co-operation of the Central European exchanges with a view to joint promotion of their markets and companies in order to attract investors and capital.
The event opened with an address of Paweł Jabłoński, Undersecretary of State, Ministry of Foreign Affairs, who stressed the importance of growing the potential of the region: “We want to bridge the gap between our region and Western Europe. The Three Seas Initiative aims to improve and create conditions for enhanced co-operation among Central and Eastern European countries. The Three Seas countries have a great potential, offer stable conditions for investors, and enjoy strong economic growth.”
The panel discussion “Leveraging the Power of Collaboration” moderated by Marek Dietl, President of the Management Board of GPW, featured CEOs of Three Seas stock exchanges: Adrian Tanase – CEO, Bucharest Stock Exchange, Petr Koblic – CEO, Prague Stock Exchange, Richárd Végh – CEO, Budapest Stock Exchange, Aleš Ipavec – President of the Management Board, Ljubljana Stock Exchange, Lukáš Bonko – CEO, Bratislava Stock Exchange, Manyu Moravenov – CEO, Bulgarian Stock Exchange, Ivana Gažić – President of the Management Board, Zagreb Stock Exchange, and Christoph Boschan – CEO, Vienna Stock Exchange. The speakers discussed how to attract foreign companies to go public on Three Seas exchanges and how to address investment needs in order to attract new individual investors to the exchange, and outlined the current conditions on their markets.
“Stock exchange indices are back to the pre-pandemic levels. We have hosted the first IPOs of technology companies in nearly 20 years. We have launched two new ETFs,” said Ivana Gažić, President of the Management Board, Zagreb Stock Exchange.
“We have to attract investors from other regions to the Three Seas region. In my opinion, this can be done through the engagement of stock exchanges, which is already there, as well as the entire financial industry,” said Aleš Ipavec, President of the Management Board, Ljubljana Stock Exchange.
“Only 2% of capitalisation on the Budapest Stock Exchange is held by regional institutions, compared to 20% in Scandinavia. The potential is evidently there. We need to encourage cross-border investors to engage in the region, especially now that many more people can invest on the exchange. I believe that the number of active investors will be growing in the long term,” said Richárd Végh, CEO, Budapest Stock Exchange.
The discussion focused among others on the international position of the Three Seas exchanges in the context of drafting European capital market regulation.
“The Three Seas countries represent half of all EU Member States. We have to be heard and our opinions must be acknowledged. It is key that 13 stock exchanges can speak with a single voice in relations with the European Commission,” said Petr Koblic, CEO, Prague Stock Exchange.
“The Three Seas region is different from the rest of Europe, which is why Commission proposals concerning the consolidated tape will affect us much more than the Western European markets and countries,” said Christoph Boschan, CEO, Vienna Stock Exchange.
“Overregulation is a major challenge for small exchanges. Issuers in Bulgaria want to migrate to markets where regulation is less strict,” said Manyu Moravenov, CEO, Bulgarian Stock Exchange.
The panellists also discussed the benefits of co-operation in the Three Seas Stock Exchanges Initiative, as well as challenges, including technology challenges, in the coming years.
“We want to promote new products and offer funds so that Slovaks can invest in real estate funds. We need technology if we are to keep pace with regulations, and the needs are growing. It is a major challenge for us, which is why technology co-operation in the Three Seas Exchanges Initiative is key,” said Lukáš Bonko, CEO, Bratislava Stock Exchange
“Synergies are invaluable. However, we have to be patient when we implement our initiatives. With the pandemic coming to an end, we need to consider further and broader promotion of the region as our flagship product,” said Adrian Tanase, CEO, Bucharest Stock Exchange.
Paweł Nierada, First Vice President, Bank Gospodarstwa Krajowego (BGK), outlined the framework of the Three Seas Initiative Investment Fund of which BGK is the initiator, co-founder and principal investor. The fund invests in infrastructure projects in the Three Seas region in three areas: transport, digital technology, energy.
“The Three Seas region has a huge potential owing to its population, average GDP growth in the last five years, and demand for infrastructure investment on the order of EUR 600 billion. The Three Seas Initiative Investment Fund is building a solid asset base and has engaged in the first three investment projects which span different segments of infrastructure and different countries of the region. The fund will reach EUR 3-5 billion with a lifetime of 15 years subject to extension. It is the first purely commercial fund and its expected gross return rate is 12-15 percent,” said Paweł Nierada, First Vice President, BGK.
The panel discussion “A Regional Index, Global Challenges. The Region’s Champions” moderated by Peter Niklewicz, GPW, featured representatives of companies participating in the CEEplus index: Marius Dan - Deputy CEO – Corporate Strategy, Fondul Proprietea (Romania), Uroš Ivanc - Member of the Management Board and CFO, Zavarovalnica Triglav (Slovenia), Marko Čižmek - Management Board Member and CFO, Valamar Riviera (Croatia), and Robert Kubin, President of the Management Board, TFI PZU, which offers a passive fund of which CEEplus is the underlying. The speakers discussed the position of the CEEplus index, its perception among regional investors, and the benefits which companies enjoy as index participants.
“In addition to a solid business model, which is key, CEEplus participants should have several other qualities, including corporate governance, transparency, and proactive investor relations. The Three Seas exchanges have done a great job stimulating economic growth in the region,” said Marius Dan, Deputy CEO, Fondul Proprietea.
“We are focusing on the Three Seas region and dedicating 75 percent of our resources to regional investors. It is a challenge to keep up liquidity in the Croatian market. I believe that regulations should serve the purpose for which they are created,” said Marko Čižmek, Management Board Member and CFO, Valamar Riviera.
“What less liquid markets of the region need, including Slovenia and Croatia, is marketing initiatives as well as shared access to our exchanges. Investor relations are essential, which is why we hold quarterly calls for investors and maintain regular one-on-one communications,” said Uroš Ivanc, Member of the Management Board and CFO, Zavarovalnica Triglav.
The CEEplus index published since 4 September 2019 covers the biggest and most liquid stocks listed on the Central European exchanges in Croatia, the Czech Republic, Hungary, Poland, Romania, Slovakia and Slovenia. The index traded at 1,258.71 points as at 30 September 2021. The index has gained considerably both in the last 12 months and since inception.
“We want to manage foreign clients and we have the necessary brand and tools. This will be our focus in the coming years. ESG is a key priority for PZU. It is a major trend in Europe which shouldn’t be considered a threat. ESG can cause shifts in the market, an opportunity we have to leverage,” said Robert Kubin, President of the Management Board, TFI PZU.
Marek Dietl, President of the GPW Management Board, summarised the Second Three Seas Stock Exchanges Conference and said: “I am proud that Three Seas issuers and exchanges boldly voice their expectations. With the potential of our region, we are in a position to define clear expectations. We can only make our message heard if we join our forces. The Three Seas cannot be a closed project limited to 12 countries, which is why I welcome the participation of Armenia and Georgia in our conference.”
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The Warsaw Stock Exchange (GPW) is the co-founder and leader of the Three Seas Stock Exchanges initiative. The initiative includes GPW as well as six other European stock exchanges in the Czech Republic, Hungary, Slovakia, Romania, Croatia and Slovenia. GPW has for years fostered and developed co-operation of the Three Seas stock exchanges by hosting and participating in key events for the development of the region as an attractive venue for investors. The first Three Seas Stock Exchanges Conference took place in September 2020 in Kraków. President of Poland Andrzej Duda was the honorary patron of the event. The key objective of the Three Seas Stock Exchanges initiative is to develop co-operation of Central European exchanges in order to jointly promote their markets and companies and attract investors and capital. Another priority of the co-operation is to present joint positions of the Three Seas exchanges on EU capital market regulation. As a tangible and fully operational capital market initiative, the CEEplus index published since 4 September 2019 covers the biggest and most liquid stocks listed on the markets of the Visegrad Group, Croatia, Romania and Slovenia. The index is the underlying of a passive fund managed by TFI PZU. The index portfolio includes 153 most liquid companies listed on the regulated markets of the Three Seas exchanges: Budapest (10), Bucharest (14), Ljubljana (5), Prague (7), Warsaw (114), Zagreb (3).
