Slovakia is preparing legislative changes to revive the country's troubled stock exchange, the chairman of the Bratislava Stock Exchange, Marian Sasík, said on Septemer 9.
The changes include the establishment of a securities commission to better enforce laws, and unspecified legislative changes designed to bring more transparency and investment protection to the market.
Sasik added, however, that the new measures would take time to become effective. "I do not expect these measures to become effective earlier than sometime in the first half of next year," he told jounalists.
The Bratislava Stock Exchange has long been plagued by low liquidity and a dearth of foreign interest compared with bigger and more active markets in the neighboring Czech Republic, Poland and Hungary.
Dealers and analysts complain that poor regulation and a lack of market transparency have been among the main factors keeping foreign investors away.
Daily turnover on the main listed floor often falls below $1.0 million, while even the most liquid blue chips often post daily volumes of less than 100 shares. "There are many reasons for the current market situation," said Sasík. "These include the lack of transparency, legislative problems, the privatisation process, a lack of protection for minority shareholders, a lack of information and little confidence in collective investment," Sasík said.
The new measures, he added, have been jointly worked out by the Finance Ministry, foreign experts and local securities traders.
Overall turnover on the Bratislava bourse totalled 2.3 billion Sk in August, but anonymous trading on the bourse's floor was worth only 200 million. The vast majority of trades are made in the form of direct deals registered at the bourse.
The official SAX index, measuring the performance of the 16 most heavily capitalised issues, was down 33.82% year-on-year at the end August, closing the month at 113.51 points.
"Real demand for Slovak shares is almost not existent, and most transactions (on the bourse) are aimed at sustaining current prices," the stock exchange said in a report on August trading development released on September 9.
14. Sep 1998 at 0:00 | Reuters