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„CESEE No Driver Yet“

Published: December 23, 2013; 12:11 · (Vindobona)

Birgit Kuras, CEO of Vienna Stock Exchange, thinks that the Vienna Stock Exchange is highly influenced by the CESEE operations of listed companies.

„CESEE No Driver Yet“ / Picture: © Wiener Börse AG

In an interview with the Austrian newspaper “Kurier”, Kuras talks about the outlook for Vienna Stock Exchange in the near future.

Since 2008, the performance of the Austrian main index ATX was not everything but promising. Kuras emphasizes that the performance must be viewed differentiated. “Since the beginning of 2002, ATX was up by 116%. The DAX grew by 75%. And the Dow Jones only rose by 57%.” Kuras says.

According to Kuras, the CESEE region will see higher GDP growth rates than Western Europe next year. However, the capital market has not fully priced in the potential of the region. “For the time being, the large investments and the big exposure of Austrian companies in CESEE are no growth driver.” Kuras explains.

In fact, the CESEE region may return to pre-crisis economic growth rates in the next years. Between 2000 and 2008, the region´s annual GDP growth came at 4.6%. However, the main condition therefore is that the countries update their business models.

Compared to their counterparts in Western Europe, most CESEE countries have a relatively low public debt quota. Moreover, GDP growth is higher than in Western Europe. However, economic growth is expected to vary substantially. In the next years, GDP growth will accelerate slightly in the region. In general, the CESEE region still has valuable assets. Above all, there is an educated workforce, stable macro-economic frame conditions and the strategically important business location.

The recovery is still fragile and depends on external demand and foreign sentiment, though. This is one of the biggest structural weaknesses. The CESEE region is still dependent on exports and foreign direct investments. Moreover, countries of Southeastern Europe are suffering from an instable financial sector, reflecting the supply shortage and the deteriorating asset quality.