Presentation of the Stock Exchanges in South-Eastern Europe

A first look at their History, Trading Volumes and Technologies

Supervisor: Prof. Polimenis Vassilios

SCHOOL OF SCIENCE & TECHNOLOGY

Kaisari Polixeni

MSc in ICT Systems – October 2011

Stock Market

Is the mean through which a company can generate funds

Is highly regulated body and good indicator of a company’s economy

Offers the investors the opportunity to own a stake in the company

Shares company’s profits

Market Capitalization

Is the total currency market value of all of the company’s outstanding shares

Is calculated by multiplying a company’s shares outstanding by the current market price of one share

Determines the company’s size

Should not be confused with the “Company’s Capitalization”, which is a financial statement term

Dissertation GoalsHave a first look at:the History of Stock Exchanges (SEs)

located in South-Eastern Europe (Athens, Belgrade, Bucharest, Bulgarian, Cyprus, FYROM, Istanbul, Montenegro, Sarajevo, Tirana, Zagreb SEs)

the Trading Volumes, both in million euro and in number of shares from 2006 to 2010 for the eleven SEs

the Technology used in SEs, as well as, its evolution and the benefits of this use

Research Methodology & ContributionResearch and collection data

◦ Mostly via internet◦ Almost all data available, apart from some details

found through e-mail communication

Contribution◦ All the work was done from scratch; no former

publication in this area

Validation◦ All the data are valid, found on the official

websites of the SEs, on the fact books published by the SEs, on Federation of European Securities Exchanges (FESE) or Federation of Euro-Asian Stock Exchanges (FEAS)

Market Capitalization 2006-2010

ASE BELEX BSE-Sofia BVB CSE ISE Mon/gro MSE SASE ZSE0

50000

100000

150000

200000

250000

20062007200820092010

ResultsAthens and Istanbul SEs are the ones

that stand out, with big difference in Market Capitalization from the followings

Montenegro and FYROM SEs are the ones with the smallest Market Capitalization

2007 was the best year for almost all SEs, with big increase in Market Capitalization and in the Index

2010 was the worst for almost every SE, with the exception of Istanbul SE that had its best year of the period, despite of the worldwide economic crisis

Information TechnologyComputerization of the order flow in

financial markets began in the early 1970s

Online tools help automate reports; traders and investors find the best investment opportunities

Reduces costs for stock market investorsAvailable real-time data to media and

investment terminals, away from the trading floor

Provides mass and fast access to the stock market

Electronic Trading Platform According to Suhua Liu, 2005, an ETP

can: Increases operational efficiency in both

centralized and fragmented marketsFacilitates cross-border 24-hour tradingReduces financial costImproves market accessReduces dealer’s marginsProvides market liquidityBut also raises concerns about

operational risks due to system failures

Trading Platforms StandardsThe National Futures Association (NFA) inthe US lists the following general standardrequirements for forex electronic tradingsystems:Authentication

◦Passwords◦ Authentication Tokens (secureID cards,

digital certificates)Encryption Transactions recording standard Pricing and slippage standard

Conclusions Big increase in Market Capitalization in 2007,

following by a bigger reduction in 2008 (probably affected by the collapse of Lehman Brothers that affected all the SEs worldwide)

The downward trend of the SEs continued until 2010, affected by the worldwide economic crisis

The passing from the Trading Floor to the e-Trading, helped the development of the SEs

Further research: Statistical Regression with more a bigger dataset in order to find relations between the Index Return and the Total Trading Volume

SCHOOL OF SCIENCE & TECHNOLOGY

I want to thank my supervisor prof. Vassilios

Polimenis for his contribution!