Stocking up

Marian Sasik
Secretary-General, Bratislava Stock Exchange


The Bratislava Stock Exchange (BSSE) is the principal organiser of spot markets in Slovakia. It was founded in 1991, one year after the beginning of the transformation of the country's economic system. The most important point in the history of BSSE came in April 1993 when the two-year preparatory stage was accomplished, during which time basic rules were drawn up governing the activities of the Stock Exchange. Commercial activity of the Exchange commenced on 6 April 1993. On that day the first trades with listed bonds were executed by members of the BSSE. The turning point was launching the book-entered (dematerialised) share trading. The shares were products of the first wave of voucher privatisation. The first such deals were made by the members on 1 June 1993. Trading takes place via an electronic stock exchange trading system, without the traditional intermediary function of traders or specialists, by means of on-line communication between the Stock Exchange and the members.

Latest developments

After the development stage in the Slovak capital market, BSSE operations showed signs of dynamic development in all activities focused on the quality, timeliness and complexity of the services provided to the securities traders and investors. The positive results of this endeavour are evidenced by increased trading volumes, continuous interest in membership as well as an increasing number of applications for new securities issues listing and registration. Currently there are 50 members at the BSSE; thus their number has increased sixfold since the beginning of 1996.

The development in securities listing has been characterised first of all by issuers' increased interest in issuing bonds. This interest met with a positive response among the securities traders. This fact is reflected in an increased demand for bonds not only in the primary but also in the secondary market. There are 26 bonds listed, 20 on the senior market and six on the junior market, 11 issues of shares are listed on the senior market and six companies are listed on the junior. More than 800 issues of securities are registered on the unlisted securities market.

The first half of 1996 was very successful. The total volume of trades amounted to SK49,948,683,080 (USUS$1.6 billion) during 126 trading days, which is almost SK10 billion (US$323 million) more than during the whole previous year. Expressed in percentages, this amount is 124.66 per cent of the previous year's volume. The average daily volume of trades amounted to SK396,418,199.7 (US$12.8 million), which is an increase of 142.4 per cent on 1995. In comparison with the previous year there was a considerable increase in members' activities on the BSSE floor. The volume of anonymous trades in each of the first six months exceeded the whole previous year's volume (SK470799,13 - US$15.2 million) and in total it represents a value of SK5,914,676, 112 (US$190.9 million). This increase of 1,156.31 per cent resulted both from introducing block trades and takeover bids as new Stock Exchange products at the end of the previous year, and making anonymous trades more attractive in BSSE's fee regulations at the beginning of 1996. A significant contribution was also made by the decision of the Ministry of Finance and the Slovak Republic on renewing trading with the IF VUB Kupon shares which were among the most traded in previous years. The volume of direct trades for the first half of 1996 amounted to SK44,034,006,968 (US$1.4 million), which also exceeded the value from the previous year (SK39,597,936,196 - US$1.3 billion), even though by only 11.2 per cent. Market capitalisation of shares increased by 20.23 per cent for the first half (compared to that at the end of 1995), despite the moderate decline in price levels since the end of 1995.

A remarkable rise in the first half of 1996 was also recorded for the SAX index. It opened the year with a value of 153.92 points and closed at the end of the half-year at 217.61 points, which is an increase of 41.5 per cent. It continued to rise during all six months. The maximum value in 1996 - 219.87 points - was recorded on 11 June.

The BSSE development was characterised particularly by the quality innovation of the financial clearing process which allows all Stock Exchange transactions to be completed in a period of three days after a trade's closing.

A measure of great significance was also the establishment of the Stock Exchange Arbitration Court for solving eventual disputes arising from Stock Exchange trades, as well as increasing the quality of information about capital market activity by means of a specialised system and publishing the monthly magazine, Burza.

BSSE is a correspondent member of the World Federation of Stock Exchanges (FIBV) in Paris and has close contacts with the Federation of European Stock Exchanges (FESE) in Brussels. In 1995 BSSE became one of the founding members of the Federation of Euro-Asian Stock Exchanges with its headquarters in Istanbul.

Despite its short history, the BSSE has succeeded in building up a dominant position in the Slovak market. Moreover, through its foreign activities it has acquired a good reputation abroad as an institution in which domestic and foreign investors trust.

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