Stock Market Guide to the Prague Stock Exchange

The Prague Stock Exchange (PSE) is the second biggest stock exchange in both Central Europe and Eastern Europe. Also known as the Burza cenných papíru Praha (BCPP) in the Czech language, the PSE serves as the Czech Republic’s main securities market organiser. The current PSE was only established in 1992 and started trading in 1993. However other forms of a Prague stock exchange were in existence since 1861. The current PSE works on a membership only principle so only licenced securities traders that belong to the exchange are able to use the exchange trading system. In order to ensure security and reliability of trade on the exchange, the activities of the exchange as well as the members have to abide by certain regulations and they are under the surveillance of the Securities Commission. The PSE also works according to an internal legislative framework which is in harmony with the standards of the EU and trading is secured by the Exchange Guarantee Fund.

Clients wishing to trade on the PSE have two basic options depending on the size of their investments. Large and medium-sized investors usually make use of the SPAD trading system while small investors may use the trading modules auction and continual. The PSE has also been making use of the RM-SYSTEM since 1993 for off-exchange trading. Any individual or company whether foreign or local can make use of the services provided by this system. Some examples of companies currently listed on the PSE are Zentiva NV, UniPetrol AS, Erste Bank der Oesterreichischen Sparkassen AG, Central European Media Enterprises Ltd and ECM Real Estate Investments AG.

The Czech Republic is seen as having one of the most developed industrialized economies of Central and Eastern Europe. Having recently adopted a policy of democracy over communism similar to that of many other countries in the area, the Czech Republic is deemed to be one of the most stable and prosperous countries in the region. Its main industries include machine tools, cars and car parts, electric power equipment, metal production and processing, chemical production, coal mining, food processing, glass, beverages and tourism.

The Czech Republic enjoys good trade relations with exports in 2004 amounting to $66.5 billion and imports in the same year amounting to $68.2 billion. The country’s main trade partners are Germany, Slovakia, Austria, Poland, UK, France, Italy, China, Russia and the Netherlands. The Prague Stock Exchange plays an integral role in the country’s economy.