NEWEX, the new European Exchange, established last year as a joint venture of Deutsche Börse AG and Wiener Börse AG, commenced trading in Vienna, Austria, on 3rd November 2000. NEWEX, as the new quality market for securities from Central and Eastern Europe. NEWEX was set up to become the central trading and financing platform for companies from these regions as well as for international market participants.
During the first phase, NEWEX decided to concentrate its activities mostly on the dynamic transformation markets of the Czech Republic, Hungary, Poland and Russia.
NEWEX represents the chance for new and restructuring companies in Central and Eastern Europe. For most of these companies, attaining the financing supply would have been unreachable due to the different quality standards of their home exchanges. NEWEX bridges the gap while offering a direct access to the regional markets and assuring the high quality standards of an exchange required by potential western investors.
The above-mentioned standards of the New Europe Exchange have been set up in accordance with EU regulations and located within the Euro zone. In addition, NEWEX is a high-tech trading platform, which uses the reliable electronic trading system XETRA of the Deutsche Börse AG. Furthermore, clearing and settlement are carried out by Clearstream, a subsidiary of the German Stock Exchange (Deutsche Börse AG). In a very similar way, NEWEX benefits also from the know-how of the Vienna Stock Exchange (Wiener Börse AG).
Nevertheless, despite NEWEX's establishing a very strict admission criteria for companies seeking a listing as well as its transparent market model, without any doubt contributing to the improvement in liquidity of these markets, the acceptance of NEWEX at the beginning was disappointingly low in the transformation regions as well as in the EU and by other international investors.
The overall unpleasant situation on the world exchange market made it even harder for NEWEX to convince the market participants of the advantages of the New European Exchange in Vienna.
Yet, the position of NEWEX seems to be slowly, yet continually, improving: As of 22nd March 2001 the important Russian telecom company Uralsvyazinform was, following the fulfilment of all conditions required, admitted to trade in the Dual Listing-Segment of NEWEX, NX.plus. Consequently, the largest Russian airline company, Aeroflot, will also be installed in the Quality Segment NX.plus on 2nd April 2001.
Experts in Europe still believe in the success of NEWEX and we can also confirm that after its not particularly optimistic start, NEWEX appears to be getting its second wind.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.