The Upcoming Tender and Interest from Foreign Groups
The era when stock exchanges operated primarily as independent national organizations seems, to a large extent, to be a thing of the past. Across Europe, stock markets are concentrated in the hands of large international conglomerates, with acquisitions and mergers reshaping the landscape of capital markets.
Cyprus is now following the same path, with the privatization process of the Cyprus Stock Exchange (CSE) entering the final stages of preparing for the bidding process.
ΣΧΕΤΙΚΑ ΑΡΘΡΑ
The interest of foreign stock exchanges in the Cypriot market, as well as recent reports from Israel regarding a possible acquisition of the CSE by the Tel Aviv Stock Exchange, have brought the issue of privatization back into the spotlight. Beyond the question of who will take control, the key question is whether a change in ownership could inject new momentum into the Cypriot capital market.
In Europe…
The operation of stock exchanges by private companies is now standard practice in the largest European markets. Euronext is a prime example, as it operates stock exchanges in eight European countries: France, the Netherlands, Belgium, Portugal, Ireland, Italy, Norway, and, most recently, Greece. It is one of Europe’s leading stock exchange groups, which seeks to integrate infrastructure and services, giving companies access to a broader investment market.
The most recent development concerns the Athens Stock Exchange, a majority stake in which was acquired by Euronext in November 2025. This agreement integrated the Greek capital market into a larger European network, with the aim of leveraging shared technological infrastructure, attract international investors, and enhance competitiveness.
A similar move had taken place in Spain in 2020, when the Swiss SIX Group acquired Bolsas y Mercados Españoles (BME), the operator of the Spanish stock exchanges, for a total consideration of approximately €2.8 billion.
A similar pattern can be observed in Northern Europe. The U.S.-based Nasdaq Group operates seven stock exchanges in the Nordic and Baltic countries, while the Frankfurt Stock Exchange is owned by the publicly traded Deutsche Börse Group and the London Stock Exchange by the also publicly traded London Stock Exchange Group. These developments do not always constitute privatizations of state-owned organizations, but are often acquisitions and mergers of already privately owned stock exchange companies.
However, the private-sector model is not applied in the same way everywhere. In Poland, the state retains control of the Warsaw Stock Exchange through a majority of the voting rights, while in Bulgaria, the Ministry of Finance holds 50.05% of the stock exchange.
These examples demonstrate that, despite the general trend toward privatization and consolidation, different models of ownership and management continue to exist.
The CSE is following the same path
In Cyprus, the privatization process is at the stage of final approval of the tender documents by the Legal Service. Speaking to Alpha on Sunday, the Chairman of the CSE Council, Marinos Christodoulides, explained that there is still no specific timeline for the completion of the process, as the Ministry of Finance is responsible for managing the tender and communicating with the Legal Service.
According to him, the entry of a strategic investor represents a significant opportunity for the development of the Cypriot capital market. Under the law, the investor must meet specific requirements related to its status as a securities market operator and its membership in the relevant international or European securities federations.
“We believe that they will bring the expertise needed to develop the Cyprus Stock Exchange and help companies go public, so they have a way to raise capital beyond the banks,” notes Mr. Christodoulides.
What this means for investors and citizens
He places particular emphasis on the potential to create a larger and more robust market, which will offer more investment options and increased liquidity. As he explains, the ease with which an investor can buy or sell shares is a key prerequisite for attracting capital.
At the same time, the development of the CSE could offer Cypriot companies more financing options, reducing their reliance on bank loans, while the government also has the option of raising capital through the market by issuing bonds.
Interest (also) from Israel
The possibility of a foreign stock exchange acquiring the CSE has gained particular interest following a report in the Israeli financial newspaper Calcalist on October 8, according to which the Tel Aviv Stock Exchange is considering participating in the privatization tender.
The report states that the potential acquisition would allow the Israeli group to establish a presence in the European stock market, while clarifying, however, that no final decision had been made regarding the submission of a bid.
When asked about this, Mr. Christodoulides stated that there have been contacts and discussions with various stock exchanges, though he declined to confirm specific names or comment on reports of Israeli interest.
Regarding the value of the CSE, which the Israeli report estimates at 20–40 million euros, he notes that any interested party will conduct its own valuation, while emphasizing that this is the stock exchange of a European Union member state, a factor that lends particular value to the investment.
Both the financial offer and the business development plan will play a decisive role in selecting the new owner. Specifically, the purchase price will account for 70% of the final evaluation, while the remaining 30% will be based on the investor’s business plan.
“The 30% of the Ministry’s evaluation will be based on the new buyer’s business plan,” states the CSE Chairman, describing this element as particularly important. As he explains, the business plan will be an integral part of the agreement, so that both the investor and the Ministry of Finance are aware of the commitments being made for the development of the Stock Exchange in the coming years.
What will happen to the employees?
Regarding the future of CSE employees, Mr. Christodoulides explains that there will be various options following privatization, such as transfer to government service or participation in an early retirement program.
At the same time, employees will be able to continue working at the Stock Exchange, provided that the new investor wishes to utilize their services and a relevant agreement is reached.
Is it safe?
Regarding safeguards and the possibility that a new owner might seek to exploit the CSE in a manner that conflicts with the interests of the Republic of Cyprus, the Chairman of the Council points to the strict criteria for selecting a strategic investor and the existing regulatory framework.
As he explains, regardless of who acquires the Stock Exchange, its operations will continue to be subject to the supervision of the Cyprus Securities and Exchange Commission and to the European rules governing capital markets. Therefore, a change in ownership does not mean that the new investor will be able to operate outside the existing regulatory framework.
The Day After
The privatization of the CSE is part of a broader European trend toward the consolidation of stock markets, with the aim of creating larger and more competitive structures.
For Cyprus, however, the key issue is not limited to the purchase price or the identity of the new owner. The real challenge will be whether the change in ownership will lead to more listed companies, greater trading activity, the attraction of foreign capital, and, ultimately, a stock exchange that will play a more active role in financing the Cypriot economy.
