III CEE Investment Conference Talking about a Brighter Future: The - PowerPoint PPT Presentation

III CEE Investment Conference Talking about a Brighter Future: The Road to Prosperity PANEL DISCUSSION II Developing a Financial Centers Network: Collaborating for developing Financial Markets in CEE Nikos Porfyris, Deputy Chief Operating Officer

Agenda  Why further Integration is necessary for deeper financial markets  Ways of collaboration that will benefit all centers in the region  The prospects of new trading platforms and integration of existing ones Page 2

We fully support further integration … …. as we are • a fully privatized group (since 2003) Securities & Derivatives Markets Trading • with over 51% international investors and 100% free float • vertically Integrated : Trading, Clearing, Settlement and Registry systems • ATHEXGROUP listed on Athens Stock 100% 100% Exchange (Aug. 2000) Market Cap. approx. € 400m • Net Earnings - FY 2013: € 32.8m - H1 2014: € 13.1m Securities & Central Securities Derivatives • that needs to create value for investors Depository Markets Clearing Page 3

We fully support further integration … …. as our main role is  to finance our local economy  with a large number of exporters / producers abroad • FTSE/ATHEX Global Traders index • FTSE/ATHEX Global Traders Plus index  with SMEs being the backbone of the economy • in need of capital to grow and sustain the yoy GDP growth, which just turned positive • with opportunities, as reflected in the FTSE/ATHEX Small and Midcap Factor Weighted index  which following a long recession period • Have already reduced costs and restructured products & services • Are restructuring their balance sheets by raising equity Page 4

We fully support further integration … …. as although in the midst of a 5 year crisis, where  ATHEX ranked 3 rd according to capital raised among FESE members In 2013  Greek companies raised € 41bn in the last 3 years  4 systemic banks raised € 28.6bn in 2013 and € 7.6bn during 2014, mainly from international investors  International investors holdings have reached a high of 61%, being over 50% for over 6 years  International investors trading volumes account for over 66%  We have had 8 consecutive quarters of capital inflows from abroad , totaling over € 3bn  Strategic investors such as Fairfax Financial, York Capital, Qatar Petroleum, John Paulson, Emma Delta have taken substantial strategic stakes in Greek Largecaps and Midcaps …. Page 5

We fully support further integration … … the size of our region (CEE) is still small as compared to West Europe Market Cap € 11,136 bn € 397 bn Trading Volumes € 25,992 bn € 1,386 bn Number of trades 562 mn 68 mn Listed companies 10,376 1,275 Page 6

We fully support further integration … Regulatory …. to safeguard Regulatory Regulatory European Central Pressure in Pressure in Pressure in Bank our future Trading Post-Trading Post-Trading Target 2 Securities – T2S Μ iFID – MiFID II/MIFIR EMIR Pressure CSDs Points  ESCB/CESR Standards :  ESCB/CESR Standards :  Settlement of  Remote Members Safety and soundness in Safety and soundness in Securities in Europe: (European passport) Settlement Clearing Same treatment of  European passport for domestic and cross-  Increased OTC trades :  European passport for all CSDs border settlement in EU all CCPs Concentration rule  Access &  Access & abolition Interoperability:  Integration of EU post- Interoperability: trading Infrastructure:  New venues: Increase of – Access to Increase of – Access to similarities to DTCC Trading Venue, CCPs or Multilateral Trading Trading Venue, CCPs or CSDs CSDs Facilities (MTFs),  In parallel to Target 2:  Price Transparency: Systematic Internalisers  Price Transparency: Extension of T2 for cash Increase of Competition Increase of Competition (SIs), Crossing Networks settlement integration in and price pressure and price pressure central bank money  Reduced Cross-Border  Increased competition  Increased safety and  Soundness and Safety Result Settlement Cost & competition between for Cross-border between trading venues Harmonization of CCPs and price pressure transactions - Increased within EU – New trading Settlement – Possible consolidation competition venues locally or from US  There is a need for establishing New Strategies for Exchanges, CCPs and CSDs Infrastructures outside EU will eventually be affected because of 3 rd country regimes equivalence  Page 7

Ways of collaboration….  Eventually, local brokers will mainly serve local investors in each country in the region - Each country must become a 1-stop shop EXAMPLE – X-Net services  We have to strengthen and link our Members’ networks EXAMPLE – Common platforms  Strong IT know how and cheap IT services will be the competitive advantage of the region - Whoever does not have the necessary infrastructure should share to decrease set up and maintenance costs Page 8

HELEX’s Proposition: Integrated Access to world markets ATHEXGroup developed the XNET platform  to offer its Members and their clients FULL access to world markets  for a variety of traded instruments  by using their existing infrastructure (trading, clearing, settlement, registry)  with no additional cost or technical overhead Through a full suite of services including  info dissemination services (data vendor information)  order routing services  execution services  clearing and risk management services  settlement and registration services  safekeeping and corporate actions support services At a very competitive fee Page 9

XNET Market Coverage Curr Cu rren entl tly : : 17 + + 4 mark rkets Futu ture : : 13 markets Custod Cus ody on only East Europ ope Wes estern rn Euro rope Asia Asia/Afri rica  Bulgaria  Lithuania  Austria  Italy  Japan  Croatia  Poland  Belgium  Netherlands  Hong Kong  Czech  Romania  Norway  Denmark  Australia Republic  Russia  Portugal  Finland  South Africa  Estonia  Serbia  Spain  France  Hungary  Slovenia  Sweden  Germany  Israel  Turkey  Switzerland  Ireland  Latvia  UK LSE /ΙΟΒ Nort orth Am Amer eric ica  Canada  US Α Page 10

Common platforms: Membership enhancement, sharing the benefits  Wider investors network: ATHEX’s, CSE’s & SIBEX’s products and services will be offered to a broader Common derivatives trading • Cash Market : 5 investment community. Outsourcing derivatives Clearing • Derivatives Market: 1 X-Net services access •  Enhanced Membership: common membership facilitates access to more Markets & Products at no Cash Market : 48 additional infrastructure Derivatives Market : 35 Cash Market : 11 cost. Derivatives market : 4  Economies of scale: lower operations costs for Members and Exchanges. Cash Market : 2  Increased liquidity: Derivatives Market : 1 Increased depth for products of all markets,  50/50 revenue sharing: Common securities trading • win-win in cross border Same CSD system • business X-Net services access • Page 11

Ways of collaboration ….  X-Net can increase Members linkage and participation from all regional markets  Listing will remain local business for each Exchange  Exchanges will benefit from revenue sharing  Members will lower their costs and increase their products portfolio  Markets will increase their liquidity from the cross-border flow  Shareholder participation in X-net is possible Page 12

Prospects of new trading platforms and integration of existing ones….  Trading platform integration is not needed – X-Net can achieve the same effect with standardizations at a different “systems level” (eg FIX protocol), at a lower cost, with lower complexity  Each Exchange can keep the systems it wishes - CAPEX  The business value for infrastructures has moved to post-trading and added value services  Post-trading systems integration is more difficult mainly due to legal differences and processes – Links between CSDs are feasible Page 13

Contact Info ATHENS EXCHANGE Group SA 110 Athinon Ave., 104 42 Athens, Greece ISIN: GRS395363005 Tel: +30 210 3366616 OASIS: EXAE Fax: +30 210 3366333 EXAE GA www.athexgroup.gr Bloomberg: EXCr.AT Reuters: Disclaimer This presentation was prepared by Athens Exchange Group. Information contained herein has been obtained from company and external sources believed to be reliable, but not guaranteed as to its accuracy or completeness. Past performance is no guarantee of future results. This presentation is for informational purposes and is not to be construed as an offer to sell or a solicitation to buy shares of ATHEXGROUP. Page 14

Annex – Value Proposition of X-Net Page 15