Spectator on facebook

Spectator on facebook


Central European stock markets may follow Asian model

Excerpts from a report in The Wall Street Journal Europe: In the first half of 1996, the Central and Eastern European (CEE) stock exchanges registered the highest incomes in the world. Combining the stock exchange boom with significant economic growth leads some analysts to think that the CEE region could follow the Asian growth model (where stock prices grew 350 percent between 1989 and 1993). According to ING Barings London, the CEE stock exchanges have the potential to grow by another 100 - 200 percent in coming years.

This year in U.S. dollar terms, the Budapest stock exchange grew 87 percent, the Warsaw exchange by 54 percent, Prague by 35 percent and Moscow by 105 percent (the Bratislava Stock Exchange grew 39 percent last year).Industrial capacity and a highly qualified labor force are advantages, some analysts say, which are not found in southeast Asia.

The price/earnings ratio in Poland is 9.3 on average, in Hungary 8.3, in Slovakia 9.0 and in the Czech Republic 12.1. By comparison, the price/earnings is 17.4 in the USA, in Germany 20.5, in Malaysia 20.8, Taiwan 20.5 and in South Korea 13.1.

Some economists say the CEE region currently has a better position relative to southeast Asia, where in the past four months export growth has slowed down. Opinions are emerging that the development of the CEE markets will rise at the expense of East Asia. A typical obstacle for CEE capital market growth, though, is the lag in local accounting. Accounting reports provided in accordance with international accounting standards are very rare.

The situation is best in Hungary (stock exchange with a market capitalization of $4.2 billion), and thus this exchange seems closer to international stock exchange standards. Currently, the highest foreign investments go to Poland, with a market capitalization of $2.9 billion. Slovakia has the smallest stock market in the region.

According to Fleming Investment Management London, the Czech and Slovak stock exchanges are likely to grow less in a boom but fall less in a decline.

Top stories

EU roaming fees to end on June 15 – in theory

Slovak customers still waiting to find out how mobile operators will implement change.

Archaeologist pieces together early history of what is now western Slovakia Photo

For an archaeologist, the most important thing is his most recent rare discovery, says Július Vavák.

Students visited Svätý Jur as part of their European Wanderer project

How to sell Slovak books to English readers

Slovak literature makes it to the big bookstores of London, but it is unlikely to become a bestseller yet.

On Wednesday, Slovak literature will be presented in one of the biggest bookstores in London. Among the new books translated into English is also the anthology of current Slovak prose selected and translated by Magdalena Mullek and Júlia Sherwood.

General Prosecutor filed a motion for the dissolution of ĽSNS

The Slovak Supreme Court received a motion to dissolve the extreme right ĽSNS party founded and led by Marian Kotleba.

Jaromír Čižnár