What is the Prague Stock Exchange (PSE)
The Prague Stock Exchange is the oldest and most prominent stock exchange in the Czech Republic. The Prague Stock Exchange is located in Prague, and was reopened in 1993 after a fifty year hiatus as a result of World War II and the existence of the communist government of Czechoslovakia from 1948 through 1989.
BREAKING DOWN Prague Stock Exchange (PSE)
The Prague Stock Exchange was initially founded in 1871, when Prague and the modern-day Czech Republic were constituents of the Austro-Hungarian Empire. The Prague exchange was a key institution in the global trade of sugar, and many sugar commodities traders had major operations in Prague. The exchange evolved over the decades to deal mostly in stocks of public companies, and by World War I, the Prague Stock Exchange was a venue solely for the trading of stocks.
After the fall of the Berlin Wall and the collapse of communist regimes, financial capitalism quickly spread to places like Prague. The Prague Stock Exchange was soon reopened, and the first post-communist trades were made on April 6th, 1993. The exchange was an important vehicle for privatizing the more than 1,000 state-owned companies that shifted to private hands in the years following the fall of the Czech communist government.
The Prague Stock Exchange and the Modern Economy
The Prague Stock Exchange is an important institution for the modern Czech economy, as the Czech Republic is home to many capital-intensive industries such as high tech engineering, automotive manufacturing, steel production and pharmaceuticals. Such industries require a lot of capital to thrive, and the Prague Stock Exchange serves as a means for Czech companies to find investors to finance these projects.
The exchange is a privately owned joint-stock company, with CEE Stock Exchange Group owning 93 percent. CEE Stock Exchange Group is a holding company that owns and controls both the Prague Stock Exchange and the Vienna Stock Exchange. Thought the holding company is the strategic owner and financial backer of both exchanges, each exchange is operated separately by in-house management.
The Prague Stock Exchange lists hundreds of the Czech Republic’s most important companies, and the overall performance of companies listed on the exchange can be measured with the PX index, its official stock index. Skoda Automotive, which brings in close to $20 billion in annual revenue, is listed on the Prague Stock exchange, along with other major Czech companies like Unipetrol and the CEZ group. Many well known financial services firms are members of the Prague Stock Exchange, like Société Générale.