Small and mid-sized stock exchanges in eastern Europe face a struggle to survive in a world where the behemoths attract the juiciest listings, and trading volumes are steadily shrinking. Across the region, capital markets tend to be small, deterring investors and issuers alike, while tighter regulation is driving share trading into over-the-counter markets, according to executives attending this week's World Exchange Congress.
Moreover, if a proposed $30 billion merger between Deutsche Boerse and London Stock Exchange Group (LSE) goes ahead, any big exchange looking to expand subsequently is expected to focus on hoovering up smaller peers.
"That would be the logical next step," Takacs said.
So if these smaller exchanges don't find a way of clubbing together, they will be taken over, or squeezed out altogether, said Hannes Takacs, a senior manager at the European Bank of Reconstruction and Development (EBRD). Bourses also complain of a dearth of new listings as local firms benefit from near-zero interest rates across Europe.
"Going public is always in fierce competition with other sources of capital," said Petr Koblic, chief executive of the Prague Stock Exchange.
He added that as a result of tighter European Union regulation, exchanges were only attracting 30-40 percent of volumes, with business going to less transparent OTC markets instead. "Unless the volume goes back to the transparent venues, then it will be very difficult in future for smaller markets."
The value of shares traded on European bourses in local currency has fallen on average 20 percent in the last decade, Brian Taylor, chief executive of BTA Consulting, told the conference.
This is partly due to the rise of electronic platforms, spreading liquidity across multiple venues.
In an effort to boost liquidity in some of the smallest markets, the EBRD has given a 540,000 euro ($600,000) grant to start SEE Link, a regional platform for trading securities on south-east European bourses.
SEE Link's order routing system is expected to go live on March 29 with the participation of its founder members, the Bulgarian, Macedonian and Croatian stock exchanges.
The hope is that it will draw the attention of big foreign investors to the Western Balkans, with a single entry point for the whole region. Serbia and Slovenia have confirmed they will join and Bucharest Stock Exchange CEO Ludwik Sobolewski told Reuters that Romania could sign up later this year.
Sinisa Krneta, chief executive of the Belgrade bourse, told the conference that by March 2017, Serbia should launch its first IPO since 1941.
"In Serbia there are several strategic national companies in the electric power industry, telecoms and pharmaceuticals, that are waiting for privatisation," he said. "(With SEE Link) I do believe we will have a much more powerful tool to persuade decision-makers to use the capital market."
Single, SEE Link-type gateways may prove more successful than formal mergers, which have had mixed results in the region, Bucharest's Sobolewski said. "It's not easy in Eastern Europe because initiatives of this kind are very often confronted with local interests, pride, and ambitions, so it is somehow politicised," he said.
He cited Poland's state-controlled Warsaw Stock Exchange, whose merger with the CEE Stock Exchange Group (CEESEG) in 2014 ended in failure. Koblic, who is also joint chief executive of the CEESEG, said that aside from the IT synergies, there had been little to justify the cost of the transaction. He added that successful mergers were difficult for exchanges without the scale of the LSE or Deustche Boerse.
Since then, the CEESEG has sold its stakes in Ljubljana and Budapest, the latter to Hungary's central bank.
With Hungary's central bank now the majority owner, Budapest has launched a new strategy to boost listings, hoping to reverse the falling turnover of recent years.
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