To show the strengths and weaknesses of the capital market in the Czech Republic and outline a long-term strategy for its development. This is the goal of the National Strategy for the Development of the Capital Market in the Czech Republic for the period of 2019-2023, which was approved by the government on 4th March 2019. At today's press conference, a new strategic document was presented by Minister of Finance Mrs. Alena Schillerová and her Deputy for International Relations Mrs. Lenka Dupáková.
The press conference was also attended by economist Mr. Zdeněk Čech from the European Commission Representation in the Czech Republic, CEO of the Prague Stock Exchange and President of the Federation of European Securities Exchange Mr. Petr Koblic, Executive Director of the Czech Capital Market Association Mrs. Jana Brodani, Executive Director of The Czech Private Equity and Venture Capital Association Mrs. Zuzana Picková and Director of the Legislation, Law and Analyzes Department of the Economic Chamber of the Czech Republic Mr. Ladislav Minčič.
“The Strategy should primarily contribute to increase the competitiveness of the Czech economy through a well-functioning capital market. Therefore, there is a set of measures to increase the attractiveness of the domestic capital market, its depth, range and liquidity. This initiative exceeds the length of one electoral term, all the more I appreciate the enthusiasm and close cooperation with all the stakeholders in the capital market involved” said Minister of Finance Mrs. Alena Schillerová.
The Strategy's main vision is to help the capital market to be more involved in the real economy. One way is to improve the quality and resilience of Czech households‘ savings. “Our citizens have traditionally been very cautios regarding savings and are mainly betting on financial products that do not give them the power to effectively capitalize their savings. The wealth of our households is thus lagging behind our western neighbors, even though their savings within the EU are one of the highest. Making the capital market more attractive should naturally motivate households to change the composition of their savings,” explained Mrs. Lenka Dupáková, Deputy Minister for International Relations.
The modification should also be made to the regulation of corporate bonds to protect small investors. Another of the objectives of the Strategy is to raise the awareness of SMEs and CFOs about the possibilities of financing through bond issues as a suitable alternative to bank loans.
“Czech companies are heavily dependent on loan financing, although it is not always the appropriate instrument for their development. Loans account for up to 26% of Czech companies‘ resources. On the other hand, stock market-traded shares and bonds do not play a sufficient role in their financing. It is therefore necessary to make other opportunities that are provided by the capital market more attractive and also to raise the awareness of the management of the companies about the benefits of such diversification of resources,” said Mrs. Lenka Dupáková, Deputy Minister for International Relations.
The Strategy also aims to facilitate the formation of joint stock companies for innovative start-ups. Other measures include support for investors investing in start-ups (the so-called business angels). The Strategy will also serve as a guide for investors who can expect predictable governmental action in this area, allowing them to make long-term investment decisions when investing on the Czech capital market. As a result, it will have a positive impact on the investments of Czech and foreign investors in the Czech Republic.
“As part of the implementation of the Strategy, we will propose and implement specific measures according to a set timetable. And every two years we will also review the current situation and evaluate the next steps,” Deputy Minister Dupáková concluded.
- National Strategy for the Development of the Capital Market in the Czech Republic 2019 - 2023PDF (936kB)
- Brochure - National Strategy for the Development of the Capital Market in the Czech Republic 2019 – 2023PDF (621kB)