Our enthusiasm for implementing the new strategy continues unabated. Our efforts to accomplish our objectives have enjoyed the support of our main shareholder, the National Bank of Hungary, the government and market players, but also that of the ongoing good performance of the Hungarian economy and an ideal investment environment. Our ownership structure also reflects the commitment of the state and the market players to the development of the capital market and the stock exchange.

We can rely on an increasing number of partners in the implementation of our strategy: last year was dedicated to networking. We made progress in meaningful cooperation with every actor capable of contributing to building a successful and active capital market. We are in contact on a daily basis with the managers or owners of the small and medium-sized enterprises and large corporations which could appear on the market as issuers in the future. In the meantime, the legislature has also shown committed support towards the Budapest Stock Exchange. In this respect, it is sufficient to mention the legislative amendment package concerning the financial intermediary system, the expansion of the range of BSE activities, or the legislative amendment favouring the establishment of Regulated Real Estate Investment Companies.

Development of the domestic capital market is now more relevant than ever. Our objective, as laid down in our 2020 strategy, is to implement a comprehensive programme to develop the capital market and the stock exchange which will enable the latter to contribute to the growth and competitiveness of the Hungarian economy. Companies must prepare for the time when they will no longer base their growth on EU grants or subsidised loans, but on market resources. The Exchange is already prepared for that phase and for the responsibility of acting as a catalyst in the economy.

When I say that the stock exchange acts as the catalyst for the economy, then small and medium-sized enterprises will be the driving force behind that economy: their economic importance is undisputed, as this sector employs nearly half of all employees and produces 50–60 percent of the GDP. But they also have to work hard to earn their place in the face of extremely intense global competition. It is essential for Hungary to establish leading centres of knowledge, innovation and production, and for a number of Hungarian companies to progress to the next stage of company growth. We at the Stock Exchange believe that providing medium-sized enterprises with access to the capital market is crucial for sustainable, innovation-based economic growth. As R&D is particularly capital-intensive, a wellfunctioning capital market and the knowledge of how enterprises can exploit its potential for their growth are essential to competitiveness.

It is our firm belief that access to capital is also a key element enabling domestic companies to attain their growth objectives. Our mission for the upcoming years is to achieve a significant increase in the capital raised through the stock exchange in Hungary, thus complementing bank loans, which still constitute the main source of financing.

Click the photo to read or download BSE Strategic Report - 2017 publication!


The objective of the BSE is to become the most important platform for competitive and successful domestic enterprises. Both the BSE50 publication, issued again this year, and the SME Summit conference we held in the autumn show that we are not only counting on large corporations. We have already identified several small and medium-sized domestic enterprises with an appropriately stable financial, business and management background and excellent growth prospects. These businesses are also invited to the exchange, as they are specifically targeted by our new market, Xtend, which offers an opportunity to take their operations to the next level. Our company development and training programme launched in cooperation with ELITE, a member of the London Stock Exchange Group, also focuses on SMEs. As a result, already the leaders of seven ambitious Hungarian companies joined the ever growing ELITE community in April, followed by three more entrepreneurs in November.

In making an IPO, the companies agree to implement more transparent operations and a more efficient business organisation. This strengthens their commitment to growth, boosts brand awareness and builds their business partners’ trust, all which have a positive effect on the companies’ profitability. Our goal is thus to have an increasing number of competitive and internationally viable companies in Hungary. BSE’s increasingly active role is a means of developing the Hungarian economy, and as such, it can provide companies with key assistance in their development. Besides promoting growth, another important aspect is that presence on the stock exchange increases and facilitates the transparency of companies and contributes to a cleaner economy.

An important element of our strategy is that the stock exchange should act as an economic catalyst and provide as many Hungarian companies as possible with access to capital markets as possible, helping them progress on the path towards sustainable growth. In its Year of Networking, the BSE signed cooperation agreements with important professional organisations including the Confederation of Hungarian Employers and Industrialists (MGYOSZ) and the Hungarian Chamber of Commerce and Industry (MKIK) in order to increase its effectiveness in communicating with companies. Companies can become competitive by improving their capital market knowledge, and raising capital through the stock exchange can offer a genuine alternative for medium-sized and growth-oriented enterprises. One of the key points of the cooperation with MFB Invest focuses on our collaboration to prepare state-owned and privately-owned companies planning an IPO for going public. However, facilitating the design, introduction and development of corporate governance frameworks is also an area in which MFB Invest and the Hungarian stock exchange expect to collaborate in the future.

Meanwhile, the demand side, i.e. the investor base, must be taken into consideration as well. Hungarian savers are essentially conservative, and the proportion of funds held in corporate securities out of total savings is small by international standards. We intend to change that. It is important to us that trust in the BSE and capital markets continues to grow, as this can lead to a higher equity ratio in Hungarian retail and institutional portfolios, which will promote an increase in equity investments in long-term – e.g. retirement – savings.

A very important element of making well-informed investor decisions is that investors regularly receive quality information and evaluations about premium category equity issuers, ones which may not receive as much attention as blue chips. To promote this, we launched a programme at the end of 2017 aimed at improving information supply and supporting liquidity, which includes making independent analyses of small- and mid-cap company equities, available free of charge on the BSE website.

Since 2016, the famous bell of the Stock Exchange was rung more than once this year for such companies as UBM Holding, OPUS Nyrt, Masterplast and last but not least, Waberer’s. Waberer’s going public in the premium category was a major milestone for the BSE. At the time of the IPO and calculated based on the HUF 5,100 offer price, the capitalisation of the company was over HUF 90 billion (HUF 90,238,043,400 or roughly EUR 291.0 million). It was thus that Waberer’s achieved the sixth largest capitalisation on the trading floor, and the newly-listed company was also added to the BUX basket with the fifth largest weight in September 2017.

However, a national stock exchange focusing on effective, active and dynamic development cannot exist without building and strengthening its international contacts. Our aim is to actively participate in global capital markets by reinforcing the regional position of Budapest and promoting the Hungarian stock exchange among international investors and financial intermediaries. To that end, we continued to organise joint roadshows with issuers and to make investor visits to London, Paris, Warsaw and Zagreb.

The Stock Exchange, as a central player on capital markets, cannot overemphasise the importance of developing one’s financial knowledge. This commitment is also indicated by its free BSE Academy training courses organised for the public, visits to the Stock Exchange also organised free of charge for secondary school students, the Kochmeister Award awarded to support students studying in higher education institutions, and the close cooperation with the Pénziránytű Alapítvány (Money Compass Foundation). Nonetheless, we believe that training courses on more specific financial and capital market subjects are best organised by a dedicated institute. A common international practice is for stock exchanges to run dedicated educational institutions in order to effectively develop money and capital markets. In the summer of 2017, the Budapest Stock Exchange established a new educational institution to modernise the financial education and test system. This institution, the Budapest Institute of Banking, was launched at the end of November.

Apart from the new strategic goals of the Budapest Stock Exchange, its most important basic duty is still to provide a transparent and liquid market for Hungarian and foreign securities. In a spirit of transparency and sustainability, the present publication on capital market development is intended to provide actors on the capital market, legislators and interested private individuals with a comprehensive overview of events over the past year relating to the Hungarian stock exchange and the Hungarian capital market.