TALLINN STOCK EXCHANGE

ANNOUNCEMENT

 

HEX AND TALLINN STOCK EXCHANGE ENTER INTO STRATEGIC CO-OPERATION

 

HEX Group (HEX) of Finland and Tallinn Stock Exchange (TSE) of 

Estonia are entering into strategic co-operation, which will 

include ownership as well as operational aspects. The aim of the 

co-operation is to build a well-functioning securities market in 

Estonia and to significantly increase the visibility of Estonian 

companies and liquidity in the trading of their shares. 

 

The co-operation will be based on HEX's offer to acquire over 50% 

ownership in  TSE, which will be achieved by purchases of existing 

shares as well as subscription of new shares in a directed 

offering. The directed issue will be decided at the Annual General 

Meeting (AGM) of TSE to be held on March 21, 2001. The TSE 

Supervisory Board has welcomed the cooperation plan among TSE, its 

shareholders and HEX, approved of the transactions needed to 

achieve HEX's majority ownership and recommended that the 

shareholders accept HEX's offer. A  prerequisite for the 

arrangement is that acceptance is acquired from relevant 

authorities.

 

Operationally HEX offers TSE a trading system under a facilities 

management (FM) arrangement, thereby extending HEX's network to 

Estonia. Creating a much larger home market will increase turnover 

and significantly enhance liquidity. International investors will 

gain easy access to Estonian securities. 

 

As before, trading will be regulated by Estonian laws and clearing 

and settlement will take place at the Estonian Central Depository 

for Securities (ECDS), a subsidiary of TSE. Likewise, market 

activity will be supervised by TSE.  In order to facilitate cross 

border clearing, preparations will begin for a link co-operation 

between ECDS and the Finnish Central Securities Depository, a 

subsidiary of HEX.

 

HEX supports a strong Estonian ownership in TSE also in the future 

and wants to develop the Estonian  equity markets in co-operation 

with local participants. The ownership arrangements will be 

finalised as soon as possible after the share purchases and 

directed share issue have been concluded. Trading with Estonian 

securities in the HEX trading system will commence in the course of 

the year 2001.

 

"HEX sees that this initiative clearly supports our growth strategy 

by expanding HEX operations to tomorrow's growth markets. The 

similarity in corporate structures of the two groups is likely to 

give synergies in operations as well as possibilities to share 

development efforts. HEX's Finnish and international members 

comprise an extensive trading network, that will expand the group 

of investors with direct access to Estonian markets. This 

arrangement is globally unique in the marketplace industry and we 

should all be very proud of the achievement " stated Mr Jukka 

Ruuska, president and CEO of HEX. "HEX is willing to advance the 

capital markets of the whole Baltic region", he adds.

 

"Integrating the Estonian securities market into international 

structures is a major strategic priority for the Tallinn Stock 

Exchange. We believe that this would mean much easier access for 

investors and better visibility for local companies, therefore 

enhancing the liquidity and attractiveness of the Estonian capital 

market. We are hopeful that an arrangement can be reached with HEX 

that would be positive for all market participants and 

stakeholders. The co-operation with HEX would necessitate an end to 

TSE's talks with the Norex Alliance," stated Gert Tiivas, CEO of 

TSE.

 

HEX GROUP			TALLINN STOCK EXCHANGE

 

Jukka Ruuska,		        Gert Tiivas,

President and CEO		CEO

 

Further information will be provided by:

Jukka Ruuska, President and CEO of HEX, tlf. +358 50 1732

Gert Tiivas, CEO of TSE, tlf. +372 51 77 579

 

 

Helsinki Exchanges Group (HEX) operates cash and derivatives market 

as well as takes care of the clearing and settlement for the trades 

at HEX. HEX has been performing extremely well during the past few 

years, the trading volume in euros nearly doubled in 1999 and more 

than doubled in 2000 compared to the previous year and was close to 

1 billion euros/day on average last year. The Group's business 

areas include also eHEX content services and outsourcing services 

for securities trading support functionalities.

 

HEX is one of the most international marketplaces in the world. 

International investors own approximately 70 per cent of the market 

value of Finnish stock exchange listed companies and the number of 

remote members has recently surpassed that of local members, the 

total number of members is over 40. The number of market 

infovendors connected to HEX has almost tripled since the beginning 

of last year and is already close to 100 vendors distributing HEX 

market data all over the world.

 

For more information, please see <a href='http://www.hexgroup.com.' target='_blank'>http://www.hexgroup.com.</a>

 

Tallinn Stock Exchange (TSE) group is the central operator of the 

Estonian securities market infrastructure. TSE group and its 

subsidiaries provide the environment for trading in securities, 

clearing and settlement of securities transactions, listing 

services, market supervision, and maintain the electronic 

securities register in Estonia. TSE group is owned mostly by 

Estonian financial institutions - commercial banks and brokerage 

firms. 

 

The market capitalisation of TSE-listed companies stood at 1.8 

billion euros as of January 31, 2001. The average daily trading 

volume was 1.4 million euros in 2000.  

 

For more information, please see <a href='http://www.tse.ee' target='_blank'>http://www.tse.ee</a>