M&A corner: A bird’s eye view on CEE stock exchanges

Written by on November 5, 2012 in Business - No comments

Although few small and medium-sized enterprise 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 top chart) 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 capitalisation;
(c)The Central European exchanges, such as Vienna, Athens, Budapest and Ljubljana have very puny capitalisations (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.

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About the Author

Les Nemethy is CEO of Euro-Phoenix Financial Advisors Ltd. (www.europhoenix.com), a Central European corporate finance company focused on mergers & acquisitions. He is the author of Business Exit Planning, published by John Wiley & Sons, available on Amazon, and Успешно излизане от бизнеса, published by Klasika I Stil Publishing House in Bulgaria.