2016 was a very busy year for the Budapest Stock Exchange. When the BSE Board of Directors adopted the new stock exchange strategy in February, the team started work with great enthusiasm and energy. This momentum has still not subsided. The accomplishment of our objectives is supported not only by the BSE’s main shareholder, the National Bank of Hungary, the government and market players, but also the great performance of the Hungarian economy and the ideal investment environment. The commitment of the state to developing the capital market and the stock exchange is also reflected in our ownership structure:
- National Bank of Hungary (81.35%)
- KBC Securities Hungary Branch Office (5.20%)
- CONCORDE Befektetési és Eszközkezelési Zrt. (4.17 %)
- OTP Bank Nyrt. (2.65 %) Erste Bank Hungary Zrt. (2.32 %)
- Other (4.31 %)
Our objective, as laid down in our strategy until 2020, is to implement a comprehensive programme to develop the capital market and the stock exchange in order to ensure that the stock exchange contributes to the growth and competitiveness of the Hungarian economy. The development of Hungary’s capital market is particularly timely at this moment, as EU funding is already expected to drop significantly before 2020, and the central bank will be reducing its supporting for corporate lending by phasing out the Funding for Growth Scheme (NHP). Accordingly, companies must prepare for the time when they will no longer base their growth on subsidised loans or EU grants, but on market resources. The development of the capital market and the stock exchange plays an essential role in this.
We can rightly refer to 2016 as the year of construction for the BSE. One of the most spectacular results of this construction is the interruption of a lengthy trend, namely that the year finally saw numerous new companies appear on the trading floor: six successful stock exchange launches, including two initial public offerings. After last year’s launches, in order to further expand the supply side, we organised and continue to organise issue roadshows, domestic and international capital market conferences and forums in order to reach an increasing number of potential issuers and investors At the same time, stimulating domestic retail demand is an essential prerequisite of a strong stock exchange, and consequently the BSE wishes to support the promotion of stock exchange investments through intense communication and educational activity. The first step of this initiative saw the launching of the BSE Academy in the autumn and the revamping of the BSE website.
Click the photo to read or download BSE Strategic Report - 2016 publication!
In addition, the Stock Exchange Advisory Board was established, a decision was made on the setting up of the National Stock Exchange Development Fund, which in the future could supply capital to small and medium-sized enterprises through the stock exchange, and the Capital Market Act was also amended. We have once again become full-fledged members of the Federation of European Securities Exchanges; market-making on the BUX futures market has begun and the free training courses of the BSE Academy have commenced in the interest of developing the capital market-related knowledge of the population.
We have concluded numerous industry and professional agreements with a view to developing the capital market; for instance, we have signed a cooperation agreement with ELITE Programme of the London Stock Exchange, as part of which we will be launching corporate financing training courses aimed primarily at Hungarian small and medium-sized enterprises.
The results achieved in 2016 are also reinforced by positive feedback from the capital market and from companies. These are especially important to us, because they allow us to receive direct support regarding our work. They confirm our belief that we are fighting for a common goal, for the development of the Hungarian capital market and the BSE.
The BSE aims to become the most important funding platform for competitive and successful enterprises in Hungary. Indeed, a well-functioning stock exchange facilitates funding for companies through equities and bonds, although being present on the stock exchange requires companies to operate transparently, which significantly contributes to “cleaning up” the economy.
We believe that having a highly developed capital market and stock exchange is a precondition for any competitive, innovative economy, which is why we are continuing construction along the lines of our five-year strategy.