Hungary renationalizes stock exchange

Hungary renationalizes stock exchange

BUDAPEST - Agence France-Presse
Hungary renationalizes stock exchange

Gyorgy Matolcsy, governor of Hungary's central bank. REUTERS Photo

Hungary’s Central Bank (MNB) said on Nov. 24 that it has bought back a majority stake in the country’s stock exchange in an effort to boost weak trading volumes after years of sharp decline.

The MNB bought a stake of 68.8 percent from two Austrian firms, CESEEG and OeKG, for 13.2 billion forints (42.5 million euros, $45.1 million), raising its overall holding to 75.8 percent.

Trading volumes tumbled in 2014 to $6 billion from $34 billion seven years earlier, after the Hungarian government raised corporate taxes and seized pension-fund assets to prop up state finances, Bloomberg reported.

Trading volumes are a ninth of those in regional rival Poland and less than half a percent of the London Stock Exchange, Bloomberg said, adding that there were 28 new listings in Warsaw and one in Budapest last year.

“The intervention of the state in the bourse was necessary because the number of listings has become so small that the capital market is no longer playing its necessary role,” the MNB said.