Presentation of the Stock Exchanges in South-Eastern Europe A first look at their History, Trading Volumes and Technologies Polimenis Vassilios 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 Goals Have 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 & Contribution Research and collection data ◦ Mostly via internet ◦ Almost all data available, apart from some details found through 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

Results Athens 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 Technology Computerization 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 investors Available 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 markets Facilitates cross-border 24-hour trading Reduces financial cost Improves market access Reduces dealer’s margins Provides market liquidity But also raises concerns about operational risks due to system failures

Trading Platforms Standards The National Futures Association (NFA) in the US lists the following general standard requirements for forex electronic trading systems: 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!