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Hungarian Central Bank Buys Austria's 68.8% Stake in Budapest Stock Exchange

Published: November 24, 2015; 19:00 · (FriedlNews)

Austrian shareholders CEESEG and OeKB sell their 68.8% stake in Budapest Stock Exchange to Hungarian Central Bank for €42m ($45m), the Hungarian central bank confirmed officially.

Hungarian Central Bank Buys Austrian 68.8% Stake in Budapest Stock Exchange / Picture: © Budapest Stock Exchange

The holding company CEESEG Aktiengesellschaft (CEESEG) and Oesterreichische Kontrollbank Aktiengesellschaft (OeKB) today announced the sale of their 50.45% and 18.35% stake respectively in the Budapest Stock Exchange (BSE) to the Hungarian National Bank.

The deal between Budapest Stock Exchange and the Vienna Bourse holding CEESEG and the Austrian Kontrollbank was already signed last Friday.

The Hungarian National Bank already holds 6.95% in the local stock exchange.

Thanks to the purchase the Hungarian central bank will have a 75.8 percent stake in the Budapest Stock Exchange.

- Austrian shareholders sell their 68.8% stake
- Transaction planned to be finalised by the end of 2015
- New CEESEG strategy to focus on cooperation model as an IT and data service provider
- Vienna and Prague remain core holdings of CEESEG

Upon approval by the competent authorities, the transaction is expected to be completed by the end of 2015.

The parties agreed not to disclose details and the price of the transaction. However, insiders say that the Budapest Stock Exchange paid €42m ($45m).

The stock exchanges plan to keep operating on a joint trading technology, which provides BSE with optimal linkage to international markets.

The partnership between BSE and the CEESEG through its Austrian subsidiary Vienna Stock Exchange is thus expected to continue, with the latter providing the trading system, interfaces, software and expertise.

“We have assessed the offer of the Hungarian National Bank and have concluded that a sale is to our mutual benefit. CEESEG will stay connected with Budapest through its international network and IT services,” says Michael Buhl, joint CEO of CEESEG and the Vienna Stock Exchange.

“Trading members as well as local and international customers will continue to benefit from well-established, high quality services,” adds Petr Koblic, joint CEO of CEESEG.

OeKB has also reached the decision to sell its stake in the Budapest Stock Exchange. For Angelika Sommer-Hemetsberger, member of the management board of OeKB, the move to withdraw is clear considering the understanding OeKB has of itself: "We have always acted as a service provider for all sections of the value chain on the capital market. This ranges from origination of a security to the clearing and settlement of exchange and OTC-transactions as well as safe custody of securities and providing information. We follow this strategy also when framing our equity investments. Therefore, it is an obvious move to reorganise our investments in line with the Vienna Stock Exchange.”

Focus on services and network

Michael Buhl comments: “In the past decade the Vienna Stock Exchange has fulfilled a dual role: it has been a gateway to CEE for international customers, while at the same time linking CEE stock exchanges to international markets. We have also built a solid network of partner exchanges in the region. This is a positioning that we stick to and aim to further build on. Nonetheless, we also need to respond to the changed market circumstances by adapting our business model. To stay competitive in the long run, we will concentrate on cooperative ventures as an IT and data service provider rather than equity investments.”

The Vienna Stock Exchange cooperates with twelve exchanges throughout the CEE region. Apart from the traditional business of a stock exchange, there are more recent business areas that contribute substantially to revenues such as data vending, index licensing and IT services. In the future, CEESEG and the Vienna Stock Exchange aim to sharpen their focus on these areas and services.

“We have state of the art trading and technology solutions, a data feed that covers twelve markets and we are the leading player when it comes to index calculation in CEE & CIS. All these advantages give us a competitive edge and diversified income streams. At the same time, our holdings in the Vienna and Prague stock exchange remain core investments and strategic building blocks,” concludes Petr Koblic.

About the Budapest Stock Exchange

In May 2004, Vienna Stock Exchange acquired a stake of 12.5% in the Budapest Stock Exchange. Together with an Austrian consortium, it held 68.8%. The integration of Budapest Stock Exchange data into the existing data feed of the Vienna Stock Exchange marked the start of the first cooperation project in late 2005. In 2008, Vienna Stock Exchange increased its investment from 12.5% to 50.45%. The stake held jointly with OeKB remained 68.8 %. Since December 2013, the Budapest Stock Exchange has operated on the internationally recognised trading platform XETRA®.

As of October 2015, the Budapest Stock Exchange had a market capitalisation of EUR 14.8 bn. The average monthly equity turnover volume amounts to EUR 1.2 bn. The most traded stocks are OTP Bank, Richter Gedeon, MOL, Magyar Telekom and FHB Mortgage Bank.