Capital.com Research TeamLong regarded as a cultural hub and located in the center of Europe, Vienna is home to nearly a third of the Austrian population. As a major tourist destination, ranking 11thin the world, Vienna has also become a premier destination for corporations seeking international exposure on a secure European exchange.
Home to the Vienna Stock Exchange (Wiener Börse AG) and ranked the world’s most livable city, Vienna is the European crossroads for global capital looking to access the markets of Central & Eastern Europe.
Vienna stock exchange
Founded in 1771 by Empress Maria Theresa, the only female ruler of the Hapsburg dynasty, the Vienna Stock exchange is one of the oldest in the world. Initially trading in only bonds, bills of exchange and foreign currency the Austria Stock Exchange is now the economic hub of Central and Eastern Europe. The Vienna Stock Exchange is based on four key components:
- Securities Listings & Trading
- Market Data
- Index Calculation
- IT Services
The Vienna Stock Exchange is the largest exchange in the country and has a market capitalization of €114.15 billion with an average monthly trading volume of €5.2 billion. The exchange is comprised of 76.5% foreign and 23.5% domestic listings. It accounts for over three quarters of all trading turnover in Austrian stocks globally, providing the maximum international exposure for Austrian companies. Specialized in IT services the Vienna stock exchange is an attractive listing option for global companies.
Austria stock market outlook
Austria is currently ranked 19thin the IMD World Competitiveness rankings and is regarded as a stable and secure financial center.
Located in the middle of Central, Western & Eastern Europe, Vienna has transformed itself into a European economic hub. It is home to over 140 indices covering 14 markets and specializes in providing trading system services and market data.
Vienna operates the economic data feed for markets in Central & Eastern Europe (CEE) including countries such as the Czech Republic, Slovenia, Croatia, Bosnia & Herzegovina and Serbia and provides index coverage in an additional 7 countries.
The Austrian economy is strong and Vienna is noteworthy for its high quality of life and cultural significance. The government of Austria provides one of the most attractive overall commercial taxation systems in Europe and favors foreign direct investment (FDI) in the tech sector heavily. A small number of companies such as RHI Magnesita have chosen to move to larger markets such as the London Stock Exchange, however the majority of these companies (including RHI) can still be traded on the global market segment of the Vienna Stock Exchange.
Benefits and risks of investing in Austria
Institutions and individuals looking to invest in Austria benefit from the high rate of international exposure, central location in Europe and a highly skilled workforce. Austria is currently rated A1 (Very Low) in country and business climate risk. The Austrian economy is robust, diversified with a focus on high value-added products. The government operates a balanced budget and invests heavily in public funding for R&D, social welfare and renewable energy.
In Austria, like all other European markets, there are some serious volatility concerns regarding the uncertainty surrounding Brexit and how this will affect the value of the Euro and short-term trade with the UK. Austria has also experienced a rather hard shift to the political right in recent years in the face of the migrant crisis. Hard line immigration policies have undermined Austria’s voice in the EU and caused friction with other member states. This political agenda could become an economic issue in the future.
Austria is heavily dependent on trade with Germany (30%) and its banking sector has a high exposure rate in more volatile markets in Central & eastern Europe. Although Austria has a relatively affluent population, it is small at 8.7 million people.
The Austrian traded index (ATX)
The Austrian Traded Index (ATX) is one of the most popular of over 140 indices listed on the Vienna Stock Exchange. Founded in 1991 with a base value of 1000, the ATX is a capital weighted price index consisting of the most frequently traded stocks on the prime market, in terms of market capitalization. The components are reviewed twice annually in March & September with a maximum replacement of no more than 3 stocks per review.
The ATX index peaked at 4926 points and is currently priced at 3032. It has a market performance of 162% (317% dividends incl) since 2001 and a YTD of 10.45% in 2019. The Vienna stock exchange index is currently comprised of six corporate segments:
- Financials (46.7%)
- Basic Industries (32.6%)
- Industrial Goods & Services (9.0%)
- Utilities (7.5%)
- Technology & Telecom (2.9%)
- Consumer Products (1.3%)
Vienna is a thriving metropolis in the center of Europe and at the heart of the Austrian economy. The Vienna Stock Exchange is highly international while continuing to be the most significant regional player. As a tourist destination Vienna is second to none, and it should be considered the same for anyone looking to invest in Central & Eastern Europe.
Editorial credit: Radu Bercan/Shutterstock
