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A new formula for attracting investors


Dániel Körmöczi, a former head of institutionals at KBC Securities, joined Budapest Stock Exchange in 2016 as Deputy CEO along with several new team members. BSE started to implement a new strategy for attracting new issuer companies and investors which bring additional volume and foreign investors to the market.

“It is our objective to elevate the financial education level of domestic entrepreneurs and to support Hungarian companies in their endeavours to raise capital and offer investors excellent investment opportunities, thus creating a win-win situation for all parties involved,” points out Dániel Körmöczi, Deputy CEO of Budapest Stock Exchange. “We have been focusing on an ambitious new strategy of formulating and implementing a stock exchange development programme in Hungary which will result in successful capital raising for Hungarian firms.

The turnaround that laid the foundation for setting up the new strategic goals was the majority ownership of BSE by the Central Bank of Hungary in December 2015.

“Budapest Stock Exchange can look back on a long history since it first start operating in 1864. In the communist era, its activities were suspended before being re-established in 1990, with the BUX index, electronic trading and several other major developments introduced in the following years. In the 1990s BSE played an important role in the privatization of major Hungarian companies,” points out Mr. Körmöczi.

 “In the past decade, it has been common practice for companies to finance future development via the credit supplied by the banking sector. Now it is our goal to keep the economy growing through the issuance of shares or bonds as well. This is a vital aspect for companies as excessive bank financing can cause problems in critical financial situations. We aim to balance this dependence on banks," explains Mr. Körmöczi.

Budapest Stock Exchange has experienced a very busy year with several developments and fresh initiatives following its restructuring in 2015.  Looking back to 2016, I can say that two shares were issued, Alteo with a total value of more than four million EUR and Duna House with eight million EUR, while four bond issuances also took place worth more than 100 million EUR. They can be definitely seen as a new milestone in our recent development and at the same time we are confident of adding new large companies to our list soon,” says Mr. Körmöczi. “In addition to the above, we have made extensive efforts to improve the legal conditions surrounding IPOs in Hungary, which can help companies to be more active in the capital market.” Budapest Stock Exchange has worked together with several Hungarian ministries to implement new regulations for REITS (real estate investment trusts) to make the process of going public quicker and less bureaucratic.

Several international road shows and regional capital market events in cooperation with investment service providers have been launched for domestic, companies where BSE introduces the listed firms to various foreign investors.

 “We have also set up a cooperation with the London Stock Exchange through the ELITE programme, which is an educational programme for companies that have the ambition to go public,” states Mr. Körmöczi. “We want to create an ecosystem, where many small and medium-sized enterprises get the financing they need and where domestic and foreign investors see good investment opportunities. We are targeting a growing diversification.”

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