Prague Stock Exchange in Brief
March 16
PRAGUE STOCK EXCHANGE
>
Established in 1993
>
Full member of the Federation of the European Securities Exchanges
>
The U.S. SEC officially granted the status of a "designated offshore securities
market“ to the Prague Stock Exchange
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Correspondent of the World Federation of Exchanges
>
Market capitalization 2008: EUR 41bn*
>
Trade value - shares 2008: EUR 34bn**
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PX group operates regulated, free unregulated,
derivative and commodity market
>
Market capitalization and trade value - shares (EURm):
■ Market capitalization
– domestic issues
■ Market capitalization
– foreign issues
>
Share of 99,5% on the Czech capital market
>
Leader in the CEE Region
■ Trade value
– domestic issues
* Domestic and foreign issues together
■ Trade value
– foreign issues
** All PSE’s numbers are “single counted” – each
transaction is in the volume only once, not as a buy +
sell. Some Exchanges still publish “double counted”
number.
INTRODUCTION
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PRAGUE STOCK EXCHANGE
PRAGUE STOCK
EXCHANGE – PSE
The organiser of
the securities market
CLEARING AND
SETTLEMENT - UNIVYC
Clearing and settlement
of trades in securities
and electricity
PRAGUE ENERGY
EXCHANGE – PXE
The organiser of
the electricity market
CENTRAL
COUNTERPARTY – CCP
Counterparty to every trading
participant in concluding trades
in electricity
CENTRAL CLEARING
COUNTERPARTY – CCC
Counterparty to every trading
participant in concluding trades
in electricity in Slovakia
Consolidated indicators of the PX Group as of 31 December
2007
2006
Total assets (EURm)
255.2
42.8
17.4
13.0
Profit before taxation (EURm)
9.9
8.5
Profit after taxation (EURm)
7.5
5.4
25.66
20.28
Revenues (EURm)
Dividend payment (EUR) *
* The value set based on the exchange rate of the Czech National bank as at June 23rd, 2008
PX GROUP
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PRAGUE STOCK EXCHANGE
2008
2007
2006
2005
2004
2003
2002
2001
8 068.6
6 413.8
3 780.7
Shares
Total yearly value (EURm)
Average total daily value (EURm)
34 223.0
36 528.2
29 946.5
34 957.6
15 038.3
135.8
146.1
119.3
138.2
59.7
32.2
25.7
15.1
40 996.3
69 288.3
57 901.3
45 882.2
32 097.8
19 888.4
15 127.8
10 639.5
28
32
32
39
55
65
79
102
858.2
1 815.1
1 588.9
1 473.0
1 032.0
659.1
460.7
394.6
25 693
18 387.8
21 104.8
17 912.3
21 621.9
34 909.5
51 870.6
54 615.9
102.0
73.5
84.1
70.8
85.8
139.1
207.5
218.5
121
132
110
96
79
81
74
84
17.5
44.1
0.2
47
41
8
25.9
67.5
1.2
6
6
2
Value (EURm)
2 441.0
1 897.8
Value (TWh)
32.727
34.368
Market capitalization (EURm)
Number of issues
PX Index
Bonds
Total yearly value (EURm)
Average total daily value (EURm)
Number of issues
Investment Certificates and Warrants
Total yearly value (EURm)
Number of issues
Futures Contracts
Total Yearly value (EURm)
Number of series
Commodities - Electricity
KEY ANNUAL DATA
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PRAGUE STOCK EXCHANGE
>
Harmonisation of legislation related to market regulation within the EU makes the Czech capital market
comprehensible and attractive to all investors used to the EU environment
>
A big advantage in the Czech Republic is the unsaturated demand of investors seeking possibilities
to appreciate their free capital on the stock market
>
Based on experience from abroad, it is expected high activity of pension funds on the Czech capital market
after the prepared pension reform comes into force
>
The group of small domestic investors is becoming more important, is showing the most dynamic growth and the
potential for growth is in hundreds of percent
>
Due to the fact that the capital market in the Czech Republic is still a relatively new phenomenon, the interest in
IPO‘s and other similar events is strong across all types of media
>
The stability of the Czech economy has been confirmed by the results of 2007 - the growth of GDP in real terms
reached 6,5% which means the fastest increase ever in the Czech history *
>
The productivity of labour as well as the employment rate rose in 2007 and has reached its maximum since the
last 11 years *
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The GDP per capita in current prices amounted to EUR 13 thousand in 2007 which means a 100% increase since
the year 2000 *
* Source: Czech Statistical Office
CZECH MARKET
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PRAGUE STOCK EXCHANGE
>
>
European Indices – Annual Changes in 2008
2 500
OMXSt
-38,8%
FTSE 100
-31,3 %
DAX
-40,4%
Euronext 100
-45,2 %
SMI
-34,8%
WIG20
-51,1%
PX
-52,7%
ATX
-61,2%
PX Index – Overall Development
2 000
1 500
SAX
-42,0%
1 000
BUX
-53,3%
BET
-70,5%
500
IBEX 35
-39,4%
S&P/MIB
-49,5%
SOFIX
-79,7%
>
5.4.2008
5.4.2007
5.4.2006
5.4.2005
5.4.2004
5.4.2003
5.4.2002
5.4.2001
5.4.2000
5.4.1999
5.4.1998
5.4.1997
5.4.1996
5.4.1995
5.4.1994
0
PX Index
>
The official blue chip price index of share issues at the Prague Stock Exchange
>
Updated 4 times a year, the frequency of the calculation is 15 seconds
>
Further information on current index composition etc. on www.pse.cz → Exchange Indices
EXCHANGE INDICES
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PRAGUE STOCK EXCHANGE
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Privately held joint stock company operating on membership principle
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Major shareholder is the Vienna Stock Exchange
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Property relation of the sock exchanges in
> Prague (Czech Republic)
>
>
>
Vienna (Austria)
Budapest (Hungary)
Ljubljana (Slovenia)
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Trading is realized through licensed securities dealers who are members of the Exchange at the same time
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Currently 21 experienced members:
SHAREHOLDERS AND MEMBERS
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PRAGUE STOCK EXCHANGE
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Trading is based on automated processing of instructions, meaning that PSE is an electronic exchange
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An advantage of the Prague Stock Exchange is its own business platform
>
the possibility to perform operational updates of the system provides the PSE with great flexibility in the
development and implementation of new products and the ability to respond quickly to new market trends
and requirements
>
SPAD - Quote driven trading module with market makers
>
The purchase and sale prices are continually quoted by the market makers
>
Trading with blue chips
>
Vast majority of blue chips has more than 1 market maker (5 to 10)
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High liquidity - PSE has one of the highest turnover velocity among the CEE markets
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Low volatility - experienced market makers are crucial
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Trading in lots
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Attracting and keeping liquidity in case of dual listings
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Automatic Trades (Auction and Continual Regime) - Order driven trading module
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Auction regime does not require trading in lots
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The continual regime enables conclusion of transactions based on continually sent buy and sell
orders for investment instruments - price and time priority apply to accepted orders
TRADING MODULES
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PRAGUE STOCK EXCHANGE
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The Exchange members enter their purchase and sale orders into the PSE automatic trading system
- matched trades are handed over to UNIVYC, a subsidiary of PSE, for settlement
>
The settlement of trades concluded in the SPAD system is irrevocable and is guaranteed by the
Exchange Guarantee Fund, the standard settlement deadline is T+3
>
Automatic trades are settled as delivery versus payment on the day S = T+3
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Block trades are settled on the day chosen by the participating members
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Transfer of money and delivery of securities are realised by the same date as the “delivery versus payment “
(DVP) - however, the settlement of trades may also occur without the realisation of cash settlement, and is often
denoted as “delivery free of payment” (DFP)
>
UNIVYC has been performing the settlement of exchange trades as well as OTC transactions with investment
instruments for fifteen years
>
The value of settled UNIVYC securities exchange trades and OTC transactions for 2007 reached a recordbreaking value of EUR 5,035 billion, representing 99.79% of all settled trades and transfers on the Czech capital
market
>
UNIVYC also provides clearing of trades concluded at Prague Energy Exchange (PXE)
CLEARING AND SETTLEMENT
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PRAGUE STOCK EXCHANGE
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PXE, the Prague Energy Exchange is a new business platform for trading with electricity in the Czech
Republic, founded by PSE
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PXE‘s aim is to develop a liquid and transparent market that is founded upon an appropriate structure
of trading rules and conditions that will ensure fair pricing for electricity
>
The PXE enables both spot and derivatives trading through its own electronic trading platform
>
On the derivatives market, it is possible to buy day, month, quarter and year contracts
> At all hours of all days, so-called Base Load
> Only from Monday to Friday (excl. non-business days) between 8 a.m. and 8 p.m., so-called Peak Load
>
The spot market enables trade in hour contracts
>
OTC clearing - PXE provides its participants with registration, settlement and scheduling of OTC trades placed on
behalf of a broker or between the Exchange participants
>
The counterparty to all exchange participants during settlement, registration of delivery and consumption is the
Central Counterparty
>
PXE hybrid trading system - Order driven trading module with market makers
>
Transparency - thanks to the order driven system
>
>
Liquidity - thanks to market makers
Anonymity - the buyer does not know the identity of the seller and vice versa
PRAGUE ENERGY EXCHANGE
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PRAGUE STOCK EXCHANGE
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The Exchange Guarantee Fund
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It is a special fund established to provide for the settlement of accounts payable by the UNIVYC members
and for the covering of risks arising from the exchange guaranteed trades, it consists of 3 funds:
> Guarantee Fund for automatic trades
>
>
>
Guarantee Fund for SPAD
Fund for Derivatives Trades
Inspection Activities
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Thanks to high standard monitoring tools, a quality and continuous surveillance is provided
>
The basis for Exchange control activity is parallel analytical monitoring based on daily monitoring and the
analysis of stock exchange trading system data
>
>
The monitoring efficiency is enhanced by simple and transparent formal procedures
In addition to daily monitoring and analysis, in-depth inspections are carried out - its focus is aimed primarily
at controlling the principles of dealing with a client, trading on credit, information obligations and
documentation etc.
SAFETY
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PRAGUE STOCK EXCHANGE
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Harmonisation of legislation related to market regulation within the EU makes the Czech market comprehensible
and attractive to all investors used to the EU environment
>
The disclosure (information) obligation is standard and common for both domestic and foreign issuers - the
language to be used to fulfil this obligation is Czech or English
>
There is no listing fee for an issuer of equities on PSE
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Broker has an incentive scheme of 1 year fee holidays for new issues where they act as a IPO manager
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No annual fee for issuers on the free market
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As a result overall pricing of IPO’s costs are quite favourable on the Czech market
>
Euroclear, Clearstream and DTCC links working
>
No additional paperwork regarding dual listings - the so-called passportisation is sufficient (no need to undergo the
entire process of having the prospectus approved by the domestic regulator)
>
Ability to perform so-called conditional trading (no need to wait for the securities themselves to be issued)
APPROACH
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PRAGUE STOCK EXCHANGE
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Number of retail investors is growing constantly from 5,000 in 2004 up to 50,000 in 2008
>
Monthly trade value of equity trading by retail investors has grown over last year to recent CZK 20bn ( EUR 833m)
>
Above mentioned figures shows that „retail“ investors at PSE are rather „high net worth individuals“ as the volume
per investor is significantly higher than on some neighbouring exchanges
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There is number of fast growing online brokers
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Members are offering margin trading
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The latest IPOs have shown a great investment appetite of the retail – in the case of NWR, significant portion of
the issue was placed among domestic retail
POWERFUL RETAIL
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PRAGUE STOCK EXCHANGE
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ČEZ “Each and every day, dozens, perhaps hundreds, of the best analytical minds of
the planet examine whether the decisions of ČEZ Group are the best.”
>
KOMERČNÍ BANKA “Placing securities on the bourse provides a company with important
feedback. Reports from analysts containing an assessment not only of the situation
of companies but that of the entire market as well as future development forecasts are
a valuable source of information. These reports then help the company to better assess
the market situation and expected development. They thus become one of the
instruments used to monitor the long-term position on the market or prepare the business
plan or budget.”
>
ERSTE BANK “After deciding to exclude the shares of Česká spořitelna from trading on
the Prague bourse, Erste Bank strived to commence the public trading of shares on
the Prague market. In this way, it wanted to provide investors with an alternate bank name
and to address an even wider group of investors.”
>
ZENTIVA “The successful entrance on the Prague and London stock exchanges in June
2004 was certainly an important milestone for Zentiva. We are pleased by the interest
shown by domestic and foreign investors in our potential for future growth.”
>
ORCO GROUP “Already in the first few weeks, the Prague bourse was bringing up to
40% of the total volume of investment, which a remarkably high figure. We were also able
to significantly expand the investor base.”
WHAT ARE THE VIEWS OF SELECTED ISSUERS
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PRAGUE STOCK EXCHANGE
>
CME “Listing on the Prague bourse has already fulfilled our expectations: CME shares are
available to investors in the regions where we are active. In this way, we have been able
to present CME to investors who are interested in this region and created an opportunity
for future cooperation. We believe that other companies focusing on the region of Central
and Eastern Europe who want to participate in its development should take the same
step.”
>
PEGAS NONWOVENS “By entering the Prague and Warsaw stock exchanges, Pegas
Nonwovens acquired greater transparency and credibility among its customers, suppliers,
and other business and technical partners. Investors are interested in our company’s
story, which makes it possible for us to turn to the market in the future to finance further
growth.”
>
VIENNA INSURANCE GROUP “For the second listing, we also considered other stock
exchanges in Central and Eastern Europe. The decisive argument for the bourse in
Prague was, however, the strong position of Kooperativa of Vienna Insurance Group on
the Czech insurance market. Another impulse was the fact that VIG is the only insurance
company listed on the Prague bourse. VIG wanted to reflect its strong participation on
the market in the Czech Republic.”
>
NWR “If a corporation achieves a certain degree of size and prosperity, it is natural that it
will offer its equity shares to investors and will place them on public markets. We have
chosen a combination of three European stock exchanges – we are registered in Prague
because our activity originated in the Czech market and we simply belong here.
In London, the demand of specialised investors oriented on the mining sector is
concentrated. We have also registered our equity shares in Poland, which is the second
most important destination after the Czech Republic for our company as concerns further
development. The owners of the successful Czech companies should act similarly – it will
be beneficial not only to them and their companies but also to the capital market and,
ultimately, to the entire economy.”
WHAT ARE THE VIEWS OF SELECTED ISSUERS
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PRAGUE STOCK EXCHANGE
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Broadcasting of a new TV programme called „Studio Burza“ right from PSE‘s headquarters has been launched in
co-operation with the public Czech TV on January 22nd, 2008
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News from capital markets three times a day
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on ČT24 channel or via Internet on the Czech TV web pages
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PSE endeavours to develop Czech capital market and supports discussions relating to
capital market
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PSE has been the main sponsor of the European Conference of the Financial
Management Association International (FMA) held in June 2008
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Corporate responsibility
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in March 2007, PSE became a partner of the newly established Unicorn College, which specializes in
information and communication technologies and management - PSE bears all the school-fees for the 50
best students
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PSE supports children‘s homes located far from big cities and out of sponsors‘ concern
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PSE sponsored the Best Company 2007 Award, whose aim is to enhance the prestige of small and middle
business that is a important pillar of every healthy economy
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Dissemination of Exchange information
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A continuous and free stream of information on trading with a 15-minute delay on PSE web page
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Final results of trading, i.e. the official price list every day and selected statistical data available for free
>
Professional users may receive Exchange data in real time (online) or the trade results when the trading day
has ended (offline)
PUBLIC RELATIONS
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