Prague Stock Exchange (PSE) is opening a new PX Start (www.pxstart.cz) market for medium-sized Czech companies. For companies in the SME segment, this creates an opportunity to raise non-debt capital directly from investors under considerably simplified conditions corresponding to the capabilities of businesses in this category.
The new PX Start market, organized by the Exchange in cooperation with selected partners and Exchange members, is intended for smaller Czech joint-stock companies with a total market capitalization (value) exceeding EUR 1 million. The rules and conditions of the new market are aimed at removing all the barriers that have thus far prevented small and medium-sized businesses from using the capital market as a source of funding.
“For smaller companies, regulated markets are virtually out of reach. This is caused by the excessive administrative requirements imposed by regulations, which increase the total cost of getting listed on the stock exchange. The full or at least partial elimination of these barriers was a crucial aspect when we were preparing the PX Start market,” says Petr Koblic, the CEO of the Prague Stock Exchange.
PX Start offers new opportunities especially to experienced, well-capitalized investors, not only individual investors but also private funds. “In the Czech Republic, we currently see a high volume of free capital held by the private sector, and at the same time there is a lack of alternative investment options. Experience gained abroad also indicates that a market for smaller companies with growth potential can satisfy this demand very effectively,” comments Petr Koblic.
Trading on PX Start will be different than on the current Prague Stock Exchange markets. There will be no continuous trades, but liquidity will be concentrated into auction days, called START Days. During these START Days, issuers’ supply and investors’ demand will be matched four times a year. The auction days will also include presentations by issuers, either personally at the auction site or through videoconferencing at www.pxstart.cz. Immediately thereafter, an auction will be held in the Xetra stock exchange system. A lot, or the minimum volume traded, is set at CZK 500,000.
Enterprises that decide to enter the PX Start market will be provided with consultations and advice by the Stock Exchange, and also by partners who can help with the essential steps and documents needed for admission to PX Start.