History of the Vienna Stock Exchange
The buying and selling of products and goods has existed since the beginning of time.
The fast genuine stock market was established in 1409 in Bruges in the house of the merchant Van der Bourse, which is where the word “bourse“ is derived.
Centers of Exchange in the 15th and 16th century could be found the following cities:
Amsterdam, Antwerp, Augsburg, Florence, Lucca, Nurnberg, Venice - and later Vienna.
The Fugger family in Augsburg, who were international mercantile bankers, owned about 10% of the Holy Roman Empire of the German Nation. The Fugger family, along with the Welser family, controlled the European economy, in time replacing the House of Medici in Florence, which had been the biggest bank in Europe during the time of the Renaissance.
The first bank in the world was founded in 1472 in the city state of Siena under the name of “Monte Pio“. Since 1624 its known as “Monte dei Paschi di Siena“.
The first financial crisis was in 1557, because of the so called “Le Grand Partie“ which was the issue of a loan to finance the New World (America). The inflated interest rate of 16% instead of 12% was ultimately what triggered the crisis.
The strong economic revival of Charles VI and other politico- economic reasons resulted in the founding of the Vienna Stock Exchange on September 1, 1771 under Empress Maria Theresa.
In the newspaper “Wiener Diarium“ on September 2, 1771 the opening of the Stock Exchange was not even mentioned.
On the first day, 16 obligations were listed but only six were traded.
One of the main reasons for establishing the Stock Exchange in Vienna was to issue Treasury bills-(Bankzettel) in an attempt to lower the debt and increase public revenue.
For a short time this did succeed.
In the first years of the 19th century the Stock Exchange became a popular - financial center of the Monarchie.
The first stock of the Austrian National Bank was finally listed on April 1 and opened for trading on May 26, 1818.
The first Railway company was listed in 1824.
During the first days of the 1873 World Exhibition in Vienna, disappointing news about a possible war between France and Germany triggered a selloff in stocks and bonds.
From May to October the market fell about 70%: 52 Industrial companies, 40 banks and 6 insurance companies closed their doors forever.
On April 1, 1875 a new stock market law came into power which lasted over 100 years until 1989.
The period from 1880 to 1914 is known as the Classical Gold Standard. Under the gold standard, each central bank was responsible for making sure the notes could be redeemed into gold.
During that time, the majority of countries adhered (in varying degrees) to the gold standard. It was also a period of unprecedented economic growth with relatively free trade in goods, labor and capital. This was strongly supported by the famous - Austrian School of Economics.
As in most other western countries, the gold standard was also introduced in Austria.
After the issuing of eight war bonds in 1914, the Stock Exchange was officially closed. Because of the strong inflation during the first two years of the war, investors were looking for stocks and real estate. Over-the-counter stock trading was booming.
In 1919 the Stock Exchange was reopened, and the market was boomed until 1924. After the collapse of the monarchy, this became the most liberal time in the Republic of Austria‘s history.
Many companies of successor states, such as Hungary and Czechoslovakia were still listed on the Vienna Stock Exchange.
In 1924, stocks at the Exchange fell sharply. It was also the year when the new currency, the Austrian Shilling, was introduced, replacing the Crone. The cost of 1 kilo of gold was 6000 Shilling.
The Stock market crash at the New York Stock Exchange in October 1929 only minimally affected Vienna.
With the annexation of Austria into Germany, the Vienna Stock Exchange was under German control during the war and was only partly closed.
After World War II the Vienna Stock Exchange was reopened on November 15, 1948. As a result of nationalization the market was very small and unimportant, although Reinhard Kamitz, minister of Finance promoted the so called “Volksaktien“(people´s shares).
On April 13, 1956 a large fire destroyed the trading room.
Industrialization during the 1950’s and the 1960‘s brought some companies back onto the market.
In the late 1960´s the market became gradually more popular again, while the bond market was continuing to grow.
1988 the American investor Jim Rogers triggered a tremendous stock market rally. He pointed out how cheap Austrian stocks were. For the first time after the World War I Austrian stocks were on the main radar of the international investment community.
Within the admission standards were harmonized with European law. The market (at that time the Index was called CA Aktienindex) gained over 100% a few months, the turnover increased 600%. Many new companies as RHI, OMV, Austrian Airlines, Verbund went public. At the same year the first Austrian Zero-Bond was issued. In 1986 the Austrian government launched tax advantages for stockholders.
In 1988 an even stronger rally started which peaked in 1990. 1989 saw a new stock market law introduced.
In 1991 the Austrian Futures Exchange, the so called ÖTOB was opened. In 1989 the electronic trading system PATS was introduced, and since 1996 the stock market has been fully electronic.
On January 2, 1991 the Austrian Traded Index, ATX replaced the old Index. The ATX, which is a Price Index started with 1000 points and consists of 20 stocks. Today the Index today is mainly dominated by the two big banks, Erste Group Bank and Raiffeisen Bank, one big oil company and several real-estate companies.
In 1997 the ÖTOB and the Stock Exchange (the Wiener Wertpapierbörse) was merged into the Wiener Börse AG.
In 2002 the Austrian Strombörse EXAA; Energy Exchange Austria started its trading platform.
In 2004 the Raiffeisen International Bank-Holding AG went public, with € 1.1 B. the so far biggest IPO at the Vienna Stock Exchange.
During the recent global financial crisis, the ATX fell by 9.75% on October 28 2008, being the biggest one day loss in the history of the ATX, with five stocks losing more than 10% on the day.
The same year the Vienna Stock Exchange acquired the majority of the Stock Exchanges in Ljubljana, Prague and Budapest which became the CEE Stock Exchange Group in 2010. Five years later the Wiener Börse sold almost all of their stocks.