Save & Close Interview: Vienna Stock Exchange CEO, Christoph Boschan, sees a challenge for politics

Even though the share ratio in Austria has risen recently, there is still great catch-up potential by international standards. While the population already holds progressive views, political discourse lags behind.

Shares protect and will continue to protect against inflation. Compared with all other forms of investment, they are, historically, the asset class with the highest returns. To be successful in building up assets, patience is essential, especially in market phases with short-term fluctuations. It is more important to focus on the long-term development than at the current stock market year. Those who make investments for the long term, with a diversified portfolio, and who pay close attention to fees will benefit. Time in the market beats timing in the market. 

There is an urgent need and big potential for the Austrian capital market to catch up on an international level. With its modern infrastructure and network, the Vienna Stock Exchange provides the crucial basis for this. However, politicians must take responsibility and further develop the framework conditions as well as set the right course. Everyone benefits from an active public capital market: citizens increase their prosperity, companies can better finance innovation, and the economy achieves higher growth rates. 

After three years of strong special effects, stock turnover in 2023 settled at pre-pandemic levels. Of course, multiple crises and geopolitical disputes affect all financial markets. In the current phase, many investors are waiting. The ups and downs are in the nature of the markets. On a positive note, during the Corona pandemic, more young people took their investments into their own hands. This is a good sign for the equity culture.

Clearly, an uncertain market environment is affecting the priorities of companies, but also of investors. Due to the rising interest rate environment, equity financing via the stock exchange is now becoming more attractive again compared to debt financing. With Austriacard Holdings, there was already growth in the top Prime Market segment in March. Telekom Austria announced the spin-off of its mobile communications tower via the Vienna Stock Exchange in the course of the year. The pipeline for IPOs is well filled. The interest shown by companies is also evident at our IPO workshops. However, good preparation is crucial in order to be able to quickly take advantage of suitable market windows.

“Right” is not a characteristic a stock market takes into consideration. The judgment lies with the investor, and any political intervention that shifts the risk-reward profile in the market creates imbalances. In general, however, the capital market offers solutions to many of the challenges our society is facing, such as an aging society, climate change, and advancing digitization. Innovation financing is equity financing. No other financing instrument brings companies as much capital, visibility, and useful governance as an IPO. Countries with strong capital markets transform faster, more sustainably, and will move into the CO₂-free, digital future with greater growth rates.

The topic has reached the core of Austrian society. The population has increasingly recognized the opportunities offered by the stock market for long-term asset accumulation and retirement provision, and people are, in some cases, ahead of the political discourse. Especially with regard to the aging society, the pressure on the pay-as-you-go pension system is growing. It is therefore necessary to ease the immensely high tax burden at an individual level. This creates financial leeway to provide for the future and secure prosperity. Now it is up to the politicians to implement their government program.