- Four billion euro in fresh capital and record volume of corporate bond issues
- Geopolitical crisis weighs down ATX
- Equity trading volumes up by 22%
- Potential for upswing in 2015
(Vienna) The Vienna Stock Exchange looks back at an eventful year 2014. While developments in the first half of the year pointed upwards, the geopolitical crisis that started in the middle of the year has been weighing down the ATX. The highlights of the stock market year 2014 include huge capital increases, one successful public offering and lively corporate bond activities. Five companies (Raiffeisen Bank International, PORR, FACC, BKS Bank and Telekom Austria) tapped the market for fresh capital and raised a total of around EUR 4 billion. Porr will also be included in the prime market as of 22 December 2014. There were three new listings (FACC, BUWOG and PIAG Immobilien), but also two de-listings (A-TEC and Century Casinos) from the regulated markets. The 37 new corporate bonds achieved a record volume of over EUR 7.2 billion. Half of the volume was issued by domestic companies (EUR 3.61 billion) and the other by foreign companies (EUR 3.57 billion). Market capitalization on the Vienna Stock Exchange was EUR 77.08 billion on 15 December 2014.
"The situation in the Ukraine and Russia led to a currency and oil price drop that brought a lot of pressure on the heavyweight banking and oil stocks in the ATX. Nonetheless, we shouldn't forget that other companies achieved very satisfactory performance. We recorded an all-time high in corporate bonds. Regarding equity capital, a higher volume was raised this year than in the past four years together," said Management Board member Birgit Kuras summing up.
Stock trading volumes up by one fifth
Equity trading stayed at high level throughout the year and was 22% higher on average than in the previous year. Total equity trading volumes on the Vienna Stock Exchange this year attained EUR 45.32 billion as of 12 December (cf. 1 Jan. 2013 to 12 Dec. 2013: EUR 37.27 billion). On average, there were around 377,000 transactions on the Vienna Stock Exchange every month in 2014 (monthly average 2013: 318,000 transactions: + 18.8%). The most active trading members were Raiffeisen Centrobank (9.12%), Deutsche Bank (8.44%), Erste Group Bank (7.69%), Morgan Stanley & Co (7.42%) and Merrill Lynch International (6.72%). From January to October of this year, there were more stock exchange transactions than in the entire previous year.
Michael Buhl explained: "The often criticized liquidity on the Viennese market received a substantial boost: trading activity in equities is around one fifth higher than in the previous year. The number of transactions executed shows that monthly there were nearly as many transactions executed as in the years from 2009 to 2011. Trading volumes do, of course, fluctuate along with rising and declining stock prices; however, the number of transactions has reached a very satisfactory high level."
Declining trend of the ATX is the only flaw
From January to 16 December 2014, the ATX dropped by 18.40% (including dividends -16.36%). After reaching its all-year high in mid-January (year-high 15 Jan. 2014: 2,729.07), in March, the ATX lost the ground it had gained. Interest rate cuts by the ECB at the beginning of June and September provided only temporary support to the ATX. In mid-October, the ATX hit its all-year low (year-low on 16 Oct. 2014: 2,032.13). Stocks trended downwards in the second half of the year especially those of companies with heavy weightings in the leading index. Two of the principal industries represented in the ATX (banks 24%, oil & gas 12%) are being negatively affected by the geopolitical crises in Russia and the Ukraine and also in the Middle East. In contrast, some stocks with lower weightings in the ATX because of their smaller free float market capitalizations still achieved excellent performance. The best-performing stocks in the ATX as of 16 December 2014 were Zumtobel Group (51.59%), Flughafen Wien (29.00%), Lenzing (22.37%), CA Immobilien Anlagen (15.95%) and BUWOG (11.20%).
"The current stock prices reflect economic worries, partly profit warnings and special effects. For next year I am cautiously optimistic. Lower energy costs, an export-supporting euro trend, higher growth in Eastern European core markets and the slightly improved economy should have a positive influence on capital markets in 2015," added Birgit Kuras.
Outlook 2015
Analysts are generally upbeat about the coming year in the light of low stock valuations. Experts on the Austrian capital market forecast a slight economic recovery starting out from a stable situation in the Ukraine and continued low interest rates. Austrian companies feature healthy balance sheets and offer investors good opportunities to participate in their growth. Dividend yields of Austrian stocks average around 3% in the ATX; for some companies, it is even 6%. This is very attractive for private investors before the backdrop of low interest rates stressed Michael Buhl: “Also in 2015, there will hardly be any alternative to investing in stocks. The average dividends that can be earned exceed by far any interest paid on savings accounts. Naturally, the risk is also accordingly higher.”
In order to support companies to raise funds on the stock market, the Vienna Stock Exchange’s Management Board hopes to see clear steps taken in the coming year to create friendlier framework conditions. Above all, tax incentives would help to motivate small and medium-sized companies to turn to the stock market for funding. “In times of limited financing options, access to the capital market needs to be made easier. We fully support policymakers in their efforts to eliminate existing barriers,” stated the Management Board members Birgit Kuras and Michael Buhl.
About the Vienna Stock Exchange
The Vienna Stock Exchange is a 100% subsidiary of the CEE Stock Exchange Group (CEESEG) which includes the stock exchanges of Budapest, Ljubljana and Prague. The CEE Stock Exchange Group is the largest stock exchange group in the region. In addition to the four stock exchanges, CEESEG operates three commodity exchanges and holds stakes in five clearing systems (CCPs) and two central securities depositories (CSDs). CEESEG makes access and trading on the local markets simpler with the aim of improving liquidity. The CEESEG stock exchanges cooperate with 12 exchanges in Central and Eastern Europe and are globally recognized for their unique CEE know-how.