Dr Panayotis Alexakis, President

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FIRST SOUTH EAST EUROPE CORPORATE GOVERNANCE
ROUNDTABLE Stock Exchanges in South-Eastern
Europe

• Dr Panayotis Alexakis, President
• Athens Stock Exchange Athens Derivatives
  Exchange
• Bucharest, September 21 2001

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Selective information on Athens Stock Exchange
and Greek Capital Market.

• Hellenic Exchanges S.A. (listed in ASE)
• Athens Stock Exchange (ASE)
• Central Securities Depository (CSD)
• Athens Derivatives Exchange (ADEX)
• Athens Derivatives Clearing House (ADECH)
• Thessaloniki Stock Exchange Center (TSEC)
• Systems Development and support (ASYK)
• Training Center

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• Products
• General Indices (2),
• Sectoral indices (16),
• FTSE ASE indices (3),
• Derivatives (futures, options, stock lending
  borrowing)
• International indices, MSCI developed market
  indices (from 31.05.2001)

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• Brokerage Firms 90
• Listed companies 352

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Sectorial Breakdown
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Capitalisation to GDP ()
1998 1999 2000 2001 (End August)
64.2 177.2 99.7 90,4
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Evaluation of the General (main market) index
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Current Situation

• Developments in local (national) exchanges.
• Objectives to be followed. Depth of the markets,
  raising of regulatory standards, convergence.
• Vision of each exchange safety and reliability.
• Mission of each exchange lever for economic
  development.

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• The economic potential of the region.
• Strong growth prospects, need for company
  finance.
• The importance of efficient stock market
  mechanism in order to activate and channel
  savings by both local and foreign investors.

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What are the developments in the European
securities market

• Rising of competitiveness among exchanges. To
  attract investors and good companies.

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The challenges of Stock Exchanges

• Increase visibility
• Attract new issuers and investors
• Broaden product range
• Define strategy
• Vertical silo?
• Horizontal integration?

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Strategic Options

• Go it alone?
• Independence, identity, flexibility, adjustment
• Invisible to investors, marginalisation, way lose
  liquidity, costs.

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• Mergers among exchanges
• Access to international markets, to advanced
  trading and clearing systems, reduction of costs
  synergy, liquidity
• Lose market control, volume of transactions on
  certain stocks lose visibility, possible
  conflicts of interest, lack of local strategy.

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• Alliances with other exchanges
• Use of single trading clearing systems,
  liquidity, marketing agreements, control over
  strategy, benefit from partners strength.
• Between independence and merger, not a full
  integration, no full benefits, loose agreements,
  costs.

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• Mergers with other small exchanges
• May improve liquidity, reduce costs, control,
  flexibility.
• Lack of genuine critical mass, visibility
  liquidity.

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• There is no one, best, solution. Different
  economic conditions for each country, legal
  framework, rules, governance, systems, level of
  capital market development, convergence . All
  render cooperation agreements a difficult issue.
  However, we must be optimistic, for future
  cooperation.

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Objective To attract liquidity, remote members,
cross membership, cross listing.
The European securities markets pass the
message Cooperation between exchanges,
cooperation among members (brokerage firms, cross
membership, common trading systems).
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South Eastern European Stock Exchanges

• There is future for them in Europe. This mainly
  stems from the economic potential of the region.
  That means that local exchanges manage this
  potential so that it is not lost to other
  exchanges. Marginalisation has to be avoided.

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Strategy to be followed

• Good listed companies of the appropriate size,
  free float and marketability of stocks, in
  addition specialisation of exchanges on certain
  economic sectors identified for S.E. Europe
  Exchange. Emphasis on company disclosure,
  corporate governance.
• Reliability. Good regulatory framework, effective
  supervision, transparency.

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• Safety Efficient trading, clearing and
  settlement systems.
• Investor confidence raising in local and regional
  market. Extensive education and training of
  potential local investors. Seminars, printed
  material, books, booklets, leaflets,
  advertisement, investor guides, encouragement
  long term investor horizon.

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• Role of brokerage firms, analysis, underwriters,
  mutual funds on investor training, investor
  portfolio management, company listing.
• Cooperation among exchanges and integration which
  is the fastest way for local stock market
  development

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Form of cooperationStart with the softest
approach

• Minimum regulatory framework on stock market
  issues.
• Cross membership, with local trading and
  clearing.
• Local trading and clearing remains. National
  stocks keep traded on local exchanges.
• However, through interface development, each
  exchange presents on line real time information
  on other exchanges, investors of each country can
  invest on other countries stock exchanges.

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• At the same time foreign investors can consider
  more directly S.E. Europe stock market as one
  market.
• Construction of transnational (combined) stock
  indices and marketing of them.

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• Let us start with working groups technological
  cooperation, regulatory issues, education and
  training cooperation, product development,
  company listing, membership issues.
• ASE is ready to cooperate on this direction.

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• ASE strongly holds that there is mutual benefit
  for all exchanges which operate autonomously in
  this proposed integration framework.
• ASE holds that S.E. Europe exchanges have to act
  for this cooperation as fast as possible, keeping
  investors and S.E. European companies active in
  our exchanges.

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For more information

• http//www.ase.gr
• Thank you for your kind
• attention