Wiener Börse Adopts New IPO Strategies

With record results across the board, Wiener Börse can look back on a successful 12 months in 2004. It displayed an impressive ability to attract capital, with inflows totalling more than EUR 4 billion. However, the proportion of initial public offerings (IPOs) was lower than anticipated. "It appears that going private is more attractive for companies than going public. We are therefore appealing to companies to take advantage of the excellent current climate for a flotation," comments Dr Michael Buhl, who joined the Wiener Börse AG Management Board on 1 January.

Further incentives necessary

Accordingly, Wiener Börse's activities in 2005 will focus mainly on continued improvement of the IPO climate. "We're planning joint initiatives with Austrian industry associations with regard to providing information and lobbying," explains Buhl. The exchange manager sees a much greater need for action in terms of creating appropriate legal and tax conditions, such as

• abolishing the 1% company tax,
• applying the same tax treatment to debt and equity,
• offering a rebate on inheritance tax when a company is transferred from one generation to the next if the company goes public
• and amending the Takeover Act.

Wiener Börse also believes that current political debate on economic issues will boost the IPO market. In this connection, the exchange welcomes ÖIAG's proposal to privatise parts of Österreichische Post AG via the stock market. "And we're totally behind the calls from the Federal Economic Chamber and the Federation of Austrian Industry for energy suppliers to be privatised," says Buhl.

Internationalisation strategy and focus on domestic market

The exchange's second focus in 2005 will be building on its co-operation with stock exchanges in Central Europe. Wiener Börse laid the foundation for a Central European stock exchange group by purchasing a stake in the Budapest Stock Exchange last May. "Vienna and Budapest have created a sound platform that can be expanded throughout the Central European region," explains Dr Stefan Zapotocky, member of the Wiener Börse AG Management Board.

"However," he stresses, "it's not our intention to buy into all the region's exchanges." Wiener Börse, according to Dr Zapotocky, sees itself more as a bridgehead to Central Europe, uniting and promoting the interests of the region's exchanges. "We believe in the idea of autonomous regional exchanges forming part of a wider group," he says. Collaborations, whatever form they take, must of course offer some benefit for Wiener Börse. The Management Board is unanimous in its message: "Our top priority always was and still is our home market."

Excellent performance in 2004

Wiener Börse outperformed the major international exchanges by a considerable margin for the fourth year in a row in 2004:

• Its leading index, the ATX, closed the year with a gain of 57.4%, and the market capitalisation grew by 44% to EUR 64.58 billion.
• Trading volume on the cash market doubled to EUR 39.55 billion last year.
• Wiener Börse gained 11 new trading members in 2004, 10 of which are major foreign investment players such as Dresdner Bank, Merrill Lynch and UBS.
• The proportion of foreign market participants in terms of total trading volume thus rose to about 40%.

Dr Zapotocky states emphatically, "Wiener Börse's excellent performance is attributable first and foremost to the transparency and quality strategy of its market participants." He adds that the increased free floats of large corporations including Wienerberger, Telekom Austria and OMV and the continued wave of privatization by ÖIAG via the exchange, as in the case of Telekom Austria, had a positive effect on the market.