VIENNA Oct 9 Vienna's stock exchange said on
Tuesday it feared losing even more trade as a result of a tax on
financial transactions set to be introduced in Austria and some
other euro zone countries.
Eleven euro zone countries agreed on Tuesday to push ahead
with the tax in a breakthrough for an initiative that has been
pushed hard by Germany and France but opposed by several other
European Union countries.
"Of course we are not happy with this tax," a Vienna Stock
Exchange spokeswoman said. "We're afraid that trade will move to
other exchanges that have not introduced the tax. We will have a
two-class system in the European Union."
Imposing the charge on financial deals is symbolically
important in showing that European policymakers are tackling an
industry blamed for triggering economic turmoil and which should
help to pay to fix the crisis.
But it is deeply divisive.
Sweden - which is in the EU but outside the single currency
zone - is a vocal opponent of a tax that it attempted to impose
in the 1980s, only to see much of its trading shift to London at
Walter Rothensteiner, chief executive of Raiffeisen
Zentralbank and one of Austria's top bankers, said it
would be better to roll out such a tax across the board.
"It would be desirable to introduce this globally to avoid
disadvantaging the countries in which the financial transaction
tax should apply," he said.
Austria has already seen two-thirds of the volume that once
traded on the prime segment of the main stock exchange disappear
to alternative electronic platforms, over-the-counter networks
and rival exchanges such as Warsaw in the last five years.
Between 2007 and 2011, annual share trading volume on the
bourse fell to 30 billion euros ($39 billion) from 88 billion,
and the first half of 2012 saw just 10 billion euros traded.
Economist Werner Hoffmann, author of a study of the Austrian
capital market published on Tuesday, said poor liquidity, a move
by investors eastwards to other exchanges, and bureaucracy - as
well as the global downturn - are to blame.
Of Austria's top 20 companies, just one - brickmaker
Wienerberger - has a 100 percent free float, and half
have a free float of under 50 percent.
"It's no surprise that companies don't want to join a market
that's on a downwards trend," said Hoffmann, who runs management
consultancy Contrast and is also a university professor.
He warned that Austrian economic growth, seen by researchers
at 0.6-0.9 percent this year, could be crimped if capital
markets do not improve and tougher capital rules restrict bank
lending that has traditionally funded much investment.
While rivals including Deutsche Boerse, the
London Stock Exchange and in particular the Warsaw Stock
Exchange have stabilised or increased their trading
volumes since 2009, Vienna has continued its downwards trend.
Just six companies have listed on the Vienna exchange since
2008, and none has done so this year. In Warsaw, 26 companies
listed last quarter alone.