The Vienna Stock Exchange is looking to boost lagging volumes by attracting high-frequency trading firms alongside its traditional bank and broker members, joint-Chief Executive Michael Buhl said on July 13.
The Vienna bourse saw average monthly equity turnover of around 5.4 billion euros ($7.7 billion) in the first six months of this year, well below pre-crisis levels and last year's monthly averages of around 6 billion euros.
"We are looking now at maybe also attracting a new member category of high-frequency traders because they are not active on the Austrian market at all," Buhl told Reuters.
"Also those traders which are active in Germany who are not yet members of the Vienna Stock Exchange, because Germans are typically interested also in Austrian stocks. So we are talking to them as prospective partners now," added Buhl.
Europe's exchanges have become increasingly keen to woo high-frequency traders - hedge funds which use super-fast computers to spit out millions of orders - who have surpassed investment banks as the main trading firms.
Stock markets including the London Stock Exchange and Deutsche Boerse have invested in their systems to offer faster trading to accommodate these black box traders.
The hedge funds, who say they prop up markets in less liquid stocks, are often blamed for making markets overly volatile. Buhl, who also heads the CEE stock exchange group of the Vienna, Prague, Budapest and Ljubljana bourses, said the group had planned for volumes to rise by around 10 to 15 percent this year, but two of the four exchanges had actually seen a drop.
"To really make up in the second half of the year what we lost in the first half of the year is going to be of course difficult but I still do hope we can reach at least as a minimum the average turnover of last year," he said.
The Vienna bourse has also not seen the pick-up in new listings it had hoped for, with Austrian solar technology group Isovoltaic's initial public offering (IPO) among more than 20 derailed across Europe this year by volatile markets.
Despite the tough backdrop, the bourse saw its first IPO since 2007 in April, while a secondary offering and a string of capital raisings pushed the total raised on its equity markets this year to around 1.8 billion euros.
"That is already a significant pick up if you compare it with the last few years," said Buhl, adding that he expected a couple more listings this year if market conditions improved.
"We have seen in the first half of the year an incredible increase in interest, with more than 50 companies attending IPO workshops, some of whom are already in a pretty late stage of preparing for an IPO."
Buhl, who is meeting with investors around the world in an effort to boost interest in the region, said he had seen a good response despite increasing competition from other high-growth countries such as India and parts of South America.
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