Vienna Stock Exchange looks to the future
The Vienna Stock Exchange celebrates its 250th anniversary this year, making it one of the world’s oldest stock exchanges. Its longevity and resilience, through wars, the fall of empires and financial crises, is partly due to a sound reading of, and response to, future market trends. In an interview with GlobalCapital, Matthias Szabo, director of debt listings, highlights three current trends that are shaping the future of the exchange, and the industry.
Digitisation in the issuance and listing process
Szabo: In the next couple of years, we will see some exciting technological developments, which have the potential to shape how the industry works, especially in the issuance process. In fact, we are collaborating with a couple of highly innovative platform providers, which we believe could revolutionize this process.
To some extent this has already begun. There are already some technologies that can help banks streamline the documentation and issuance process. This has started in areas where there is greater product standardization, such as in structured investment products. I expect this trend will also come to more listed products, such as medium-term notes.
Progressive and forward-looking exchanges can support their clients by integrating the listing process into their digitized, automated workflow.
We already enable high frequency note issuers to automate the process of submitting data and files to list their notes on the exchange. These issuers have built their own digitized, automated workflow system, but we created the opportunity for them to automatically list their notes with us in this way. This helps efficiently scale-up their issuance activity.
It is this type of flexibility, automation and quality of service that has helped Vienna Stock Exchange be one of the fastest growing listing hubs in Europe with over 2,200 new debt listings year-to-date.
Supporting the ESG revolution
Szabo: Environmental, social and governance issues are very important for companies and investors alike and are perhaps the most powerful force shaping the future of finance and investment.
The role of exchanges is not just helping educate investors and issuers about green, social and sustainable financing, it is also about providing the visibility and transparency the market needs to safeguard its integrity.
We have a dedicated green and social bond segment, and in the past year we have seen record green and social bond issuance on the exchange, including €1.8bn raised by Austrian issuers in the first four months of this year.
These issues are just as important on the equity side. Indeed, issuers really need to think about how they can include ESG into their equity story.
What’s interesting is the importance of ESG across sectors and company sizes. We are seeing lots of interest from SMEs in the green or sustainable finance and investment theme. That’s good for the future as some of them will grow into the tomorrow’s blue-chip companies.
Capitalising on the cross-border opportunity
Szabo: There has been a growing trend among debt issuers to look at competitive exchanges outside of their usual ecosystem. The diversity of European exchanges in particular allows issuers to select the listing venue that is best suited for the various debt security offerings.
Our business has grown on the back of this trend, and particularly in sectors such as structured finance, structured investment products and corporate private placements. From a listing perspective, there are a number of reasons why Vienna is attractive.
In the main, we offer a flexible and reliable alternative listing solution, and especially when issuers do not require a regulated market, but still require a listing on a recognized stock exchange.
Issuers are also attracted by the simplicity of the listing process, how much flexibility they have to communicate with their investors, and our responsiveness as an exchange.
The simplicity of the listing process is perhaps the most compelling factor. We have removed common frictions, such as tedious review procedures, and in reviewing listing documentation, we primarily focus on information that is only relevant to investors.
This type of pragmatic approach considerably speeds up the listing process and can save issuers and legal advisors a lot of additional work by reducing the amount of paperwork they need to deal with.