The Hungarian Stock Exchange, the ancestor of today’s Budapest Stock Exchange (BSE) started its operation on 18 January 1864 in Pest on the banks of the Danube (in a building of the Lloyd Insurance Company). The committee in charge of setting up the exchange was led by Frigyes Kochmeister, who was also elected as the first chairman of the exchange (1864-1900). Although the institution was set up as a stock exchange, four years after its inception it acquired the Grain Hall, the centre of grain trade, becoming the newly created Budapest Stock and Commodity Exchange (BSCE). It operated under this name for 80 years as one of the leading stock exchanges in Europe. When the exchange was launched in 1864, there were 17 equities, one debenture, 11 foreign currencies and 9 bills of exchange listed. After a few years of slow growth, 1872 saw the first significant market boom, when the Minister of Trade approved the articles of incorporation of 15 industrial and 550 financial companies whose shares were then listed on the exchange.

The BSCE moved into a new building in 1873 and until 1905 continued its operations in a building on the corner of Wurm Street (now Szende Pál Street) and Maria Theresia Street (now Apáczai Csere János Street). In 1905 it relocated to the Exchange Palace on Szabadság square (now TV Headquarters) until shortly after WWII in 1948.

The first real market crash of the exchange occurred in May, 1873. It took over a decade and a half following the crash before domestic investors regained confidence to invest in the stock market again.

The early 1890s marked another period of spectacular market boom in the exchange’s history, partially fuelled by a general investment optimism that was characteristic of the Millennium years, and by recent trends in the international stock markets. Following 1889 the stock prices of companies listed on the Budapest Stock Exchange were also published in Vienna, Frankfurt, London and Paris, attesting to the international importance of the BSE. From the1890s Hungarian government bonds were regularly traded on the stock exchanges of London, Paris, Amsterdam and Berlin. A new invention, the telephone, was the main source of communication during these years.

By the turn of the century, there were already 310 securities traded on the exchange; by the beginning of World War I, this increased to almost 500. The annual turnover in 1913 reached one million shares and the turnover of the Budapest Giro and Mutual Society amounted to 2.7 billion Crowns (the ancestor of the Forint). At the same time there was also a dynamic expansion in grain trading with almost 400,000 tons in 1875, growing to one million tons by the turn of the century and close to one and a half million tons by WWI. As a result of this expansion the BSCE was propelled to become the leading grain exchange in Europe.

> Further (1914-1948)