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Vienna Stock Exchange: The Consolidator?

Co-CEO Michael Buhl has grand vision for the tiny Austrian exchange.

Capital Beat Blog

Aside from Mozart and pastries, could Austria soon claim fame for its equity market as well?

Michael Buhl, co-CEO of the Wiener Börse, also known as the Vienna Stock Exchange, does not hide his ambitions for the tiny Austrian exchange that he runs. He’d like the börse to be the gateway for international investors to invest in Central and Eastern European markets. “We want to be the consolidator of the whole region,” says the 50-year-old Austrian native who was once a trader at several Austrian banks. “Our ultimate goal is for international investors and traders to access and trade in our exchanges as easily as any other markets in the world.”

The Wiener Börse has made aggressive moves in the past few years to make that vision a reality. In 2004, it acquired a 14 percent stake in the Budapest Stock Exchange, later increasing that holding to 50.5 percent. Last year, it bought a 81 percent stake in Ljubljana Stock Exchange in Slovenia and a 92.7 percent stake in the Prague Stock Exchange. The Wiener Börse also has established relationships with stock exchanges in Bucharest, Romania, as well as two exchanges in Bosnia and Herzegovina, one in Sarajevo and another in Banja Luka. Buhl also has his eye on the Warsaw stock exchange and Bulgaria’s Sofia stock exchange.

Behind this grand aspiration is a tiny operation. The total market capitalization of the Wiener Börse is 79 billion Euros — half the size of Wal-Mart’s market cap. Average monthly turnover is a meager 6.1 billion Euros. So far this year, there have been nine capital raising deals with total proceeds of 2.35 billion Euros.

Buhl also faces some tough competition. The Wiener Börse is going head to head with the slightly larger Warsaw exchange in the race to become regional leader. When Warsaw’s exchange wanted to sell itself this summer, it shut out arch rival Vienna from bidding. Other exchanges, such as the ones in Turkey and Russia, are all vying to become the one that consolidates the rest.

Vienna’s acquisitions so far have been limited to smaller and less established markets. In order to succeed with his strategy, Buhl will need to show flawless execution in integration, and he says that’s exactly where he’ll focus next. Buhl plans to unify the trading hours, corporate governance and trading systems of Wiener Börse and its three majority-held exchanges (what he calls the CEE Stock Exchange Group), to simplify the process for international investors.

Next, he will have to persuade more international investors to invest in Austria. U.S. investors are the biggest institutional investors at the Vienna exchange now, representing 21.6 percent of listed companies. Buoyed by recovering economies in central and eastern Europe, the Vienna exchange chief has a simple message: Buy Austria, now. Unlike the controversial “Buy America” provisions, there is nothing politically incorrect about that.

Xiang Ji (Nina) is the capital markets reporter at Institutional Investor, covering mergers and acquisitions, debt and capital markets from an institutional investor’s perspective. Xiang Ji was formerly with BusinessWeek in China covering the wider business world. Send email to

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