CEESEG sells Budapest; outlines new strategy

The exchange group plans to focus on providing IT and data services as it makes its second divestment this year.

The Central and Eastern European Stock Exchange Group (CEESEG) has sold its stake in Budapest Stock Exchange as parts of its plans to focus on a new strategy based on IT and data service provision.

This is the second sale by CEESEG this year, after it divested from Ljubljana Stock Exchange in Slovenia in July. It still owns the Vienna and Prague exchanges and says these remain core holdings for the group, with Vienna seeing the bulk of its trading activity.

CEESEG and financial data provider Oesterreichische Kontrollbank will sell their respective 50.45% and 18.35% stakes to the Hungarian National Bank, which already holds a small 6.95% stake, with the transaction expected to complete by the end of 2015. Pricing details were not disclosed.

The recent sales indicate a new strategy for CEESEG which will be based around selling its IT and data services and cooperating with other exchanges in the region.

Michael Buhl, joint CEO of CEESEG, said: “In the past decade the Vienna Stock Exchange has fulfilled a dual role: it has been a gateway to CEE for international customers, while at the same time linking CEE stock exchanges to international markets.

“We have also built a solid network of partner exchanges in the region. This is a positioning that we stick to and aim to further build on. Nonetheless, we also need to respond to the changed market circumstances by adapting our business model. To stay competitive in the long run, we will concentrate on cooperative ventures as an IT and data service provider rather than equity investments.”

Vienna Stock Exchange said it cooperates with 12 exchanges across the CEE region and says business areas such as data vending, index licencing and IT services can contribute substantially to revenues.

CEESEG began building a stake in the Budapest Stock Exchange in 2004 and increased its investment substantially in 2008. However, since the financial crisis, investor interest in eastern European stocks has waned and this may have made it difficult for CEESEG to realise its former goal on creating a large venue operator that spanned the region.