Prague, April 5 (CTK) – The volume of trading in shares on the Prague Stock Exchange (BCPP) keeps falling, in the first quarter of this year it reached Kc39.5bn and was Kc1bn lower than a year earlier, according to information from the BEPP.
The BCPP celebrates 25 years of existence these days.
Traded volume last year decreased by Kc30bn to Kc139bn. The volume of deals has been falling constantly since 2007 when it exceeded Kc1,000bn.
Opinions of dealers about the Prague bourse’s situation differ.
“The Prague Stock Exchange’s story certainly cannot be labelled as successful. Compared with neighbouring Poland, traded volumes are ten times lower,” Tomas Pfeiler of Cyrrus company told CTK.
The main problem is lack of interest of Czech companies to enter the stock market. Investors focus in particular on large and stable companies which have lately been to some extent leaving the stock exchange floor.
The BCPP’s reputation was also harmed by the cases of companies NWR, Orco and ECM, for example, after the introduction on the market, their value tumbled to a fraction of their price, he added.
The Prague bourse is not as active as some larger developing markets but it fulfils its function quite well, said Ceska sporitelna analyst Petr Bartek.
The BCPP provides to investors quite liquid and transparent participation in the development of the local economy, stock owners can raise the value of their investment via the bourse and the bourse also provides access to financing so companies do not have to take a loan, he remarked.
Moneta Money Bank’s entry in the BCPP can serve as a good example. The market was able to absorb even such a large stock issue worth Kc35bn without problems, Bartek added.
He expects the traded volume to be rising slowly together with the growth of the economy. New stock issues or stocks leaving the bourse will be key for major growths or falls, however. Moneta, for example, now regularly ranks among the three most traded stocks on the market, Bartek recalled.
With respect to the planned withdrawal of shares of Fortuna lottery company and Pegas Nonwovens textile producer from the bourse, Pfeiler expects that the falling trend in the traded volumes will continue.
Entry of a large and stable company to the BCPP main market would help set the falling traded volumes in motion. However, seen the low debt financing costs, he does not expect large companies to be entering the BCPP in the near future.
Despite that, shares on the Prague bourse are doing well.
“The Prague bourse is one of the best performing stock markets in the world thus far this year. In the past years, the Czech bourse has avoided many global trends which had a positive effect on the global stock markets for many years but now are changing direction and pull stock prices in the world down,” said BH Securities broker Martin Vlcek.
The high dividend yield of most Czech titles raises their attractiveness and at the same time dampens potential falls and swings in their prices, he noted.
Another reason for the good performance of the Czech bourse is the fact that the sector composition of the Czech index is different from the global markets. In Prague, most stocks are from the sectors of finances, energy and telecommunications. Telecommunications and energy are rather defensive sectors.
The BCPP is a 92.74 percent subsidiary of CEE Stock Exchange Group (CEESEG), the biggest stock exchange group in Central and Eastern Europe.
Stock traded volumes on BCPP:
|
Year |
Kc billions |
|
Q1 2018 |
39.5 |
|
2017 |
139 |
|
Q1 2017 |
40.6 |
|
2016 |
168 |
|
2015 |
168 |
|
2014 |
153 |
|
2013 |
175 |
|
2012 |
251 |
|
2011 |
371 |
|
2010 |
390 |
|
2009 |
464 |
|
2008 |
852 |
|
2007 |
1,013 |
|
2006 |
849 |
|
2005 |
1,041 |
|
2004 |
480 |
|
2003 |
257 |
Source:BCPP
