Hungary To Open Limited Stock Exchange Next Year
BUDAPEST, Hungary (AP) _ The communist government will open a limited stock exchange in Budapest on Jan. 1 with members only permitted to buy and sell shares, according to the head of the securities trade secretariat.
Ilona Hardy, in an interview with the government daily Magyar Hirlap published Monday, said financial institutions that conduct weekly ″dealers days″ that were introduced earlier this year would discuss the establishment of a self-governing council and an ethics committee at a meeting Tuesday.
Establishment of a stock exchange even with a severe restriction on membership is a significant break from the anti-capitalist economics followed by Hungary and other eastern European nations following Soviet domination at the end of World War II.
Hardy was quoted as saying the creation of a closed joint-stock company could be followed by the transformation of other companies into joint-stock firms with the stock exchange establishing their value.
The planned stock exchange is to open at the same time that a new law on companies goes into effect.
Government officials have said the law, now in the drafting stage, will be presented to Parliament in the fall. It is to put state, cooperative and private enterprise firms on an equal footing and limit state monopolies in some areas.
Hardy said about half of the securities issued in the first six months of this year, valued at the equivalent of $74 million, have been sold on secondary markets.
According to the official MTI news agency, which carried excerpts of the interview, Hardy said the bond rate has dropped to between 90 and 93 percent, leading issuers to offer bonuses worth between 1 and 3 percent in an effort to create a higher demand.
On July 1, interest rates on private deposits rose by an average 4 percent, making bonds issued last year with a fixed interest less attractive, MTI said.