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Boss of Wiener Boerse Sees Opportunity in Dual Listing (interview)

Ljubljana, 16 October (STA) - The operator of the Ljubljana Stock Exchange plans to list Slovenian blue chips on the Vienna Stock Exchange, whose boss Heinrich Schaller says that Slovenian companies are interested in dual listing, but have not taken any final decisions yet.

Dual listing, which could be realised next year, is an opportunity to increase liquidity, but the stock exchange is not an investment bank and the companies will need to do a lot themselves, the chairman of Wiener Boerse has told an interview with the STA.

Many of the investors at the Vienna Stock Exchange are international, about 30% come from the US; trading volume, at EUR 63.8m daily, is about three times the figure at the Warsaw Stock Exchange, and the average market capitalisation of companies is about EUR 800m, compared to EUR 174m in Warsaw.

Talks with Slovenia's leading companies are under way, but Schaller could not say how much the cost of dual listing would be for the companies, as it depends on the market capitalisation, "but you can rest assured that it will be very cheap, if they pay anything at all."

The low liquidity on the Ljubljana Stock Exchange, which has been taken over by Wiener Boerse in 2008, can be blamed on the crisis, as liquidity fell on all capital markets, but not wholly, says Schaller, who believes privatisation processes should be sped up in Slovenia.

"International investors are not too keen on political interference in companies. It is not necessary for the state to withdraw completely from companies, but it can keep 25% plus one share and sell the rest through the stock market. We have privatised quite a few companies via the Vienna Stock Exchange in Austria."

Schaller says that while now is not the right time to sell, all state-owned companies should be slated for sale. Capital markets are rather nervous at the moment as there is no solution to the debt crisis in sight. But once Europe solves the issue, markets will soon return to growth, although not to pre-crisis levels.

Schaller believes the decision to acquire the Ljubljana Stock Exchange was right. It was part of the strategy to develop the regional market based on local stock markets. He says Wiener Boerse does not plan to close down the Ljubljana Stock Exchange, but would not say what happens if liquidity situation does not improve.

The Slovenian capital market has so far been driven mostly by home money, which Schaller believes must change. He also believes that big Slovenian companies are interesting enough for foreign investors, but that it is currently not the right moment to recapitalise companies via the stock market.

It also depends on the amount of the capital injection. Major investors will be more interested in bigger shares because they know they can always sell them, the official says when asked about lacklustre trading in the Slovenia's second biggest bank, NKBM, at the Warsaw Stock Exchange.

He deems the interest of foreign investors sufficient for the Slovenian capital market to restore decent trading volumes in two to three years. But he says that at the moment the banks' attitude to the capital market is problematic as they are primarily concerned with themselves.

His view is that in the future companies in Slovenia and across Europe will have to turn more and more to the capital market for financing as financing by banks is expected to become more restricted and costlier.

However, he believes support by investment banks would still be needed for the pharmaceutical company Krka, for example, to raise EUR 300m in capital. He also says that it would be easier for Krka to be listed on another market with better liquidity to get necessary capital.

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