A Bird’s Eye View on Central Eastern European Stock Exchanges

05 Nov 2012

Although few SME owners will ever take their companies public, it’s useful nevertheless for business owners to keep an eye on what’s going on with stock exchanges, if for no other reason, because they provide some interesting benchmarks.

What surprised me about the most recent statistics (see chart below) is that:

(a) The Alternative Investment Market (AIM) in London leads by number of listed companies;

(b) The Moscow Stock Exchange dwarfs both Warsaw and the AIM in terms of Market Capitalization;

(c) The Central European exchanges, such as Vienna, Athens, Budapest and Ljubljana have very puny capitalizations (although Athens has a respectable number of companies listed).

Results concerning liquidity were equally surprising:

(a) The Moscow Stock Exchange once again dominated with respect to value of shares traded, at least during the month of September 2012. Istanbul was surprisingly close behind.

(b) The AIM still dominated in terms of number of trades.

(c) Warsaw had more value of shares traded, but far less number of trades, than the AIM.

(d) The remaining Central European exchanges once again had very low levels, both in terms of value of shares traded and number of trades.

In a way, the results concerning Russia are not that surprising. Size of country and economy, at some point, should translate into size of stock exchanges. The Moscow Stock Exchange finally seems to be coming of age. Istanbul also benefits from size and momentum of the Turkish economy.

In this day and age, companies are increasingly listing on stock exchanges other than in their home country, or obtaining multiple listings. Hence it is worth keeping an eye on what is going on throughout the continents.

For companies in Central Europe that wish to go public, the AIM and the Warsaw Stock Exchange are two options that should still be seriously considered.