030107_cinque anni BIt

Five years ago, on 2 January 1998, Borsa Italiana Spa, the company responsible for the organisation and management of the financial markets and created as a result of privatisation of the Stock Exchange Board by the Ministry of Finance, started operating as a manager of the regulated equity, bond and derivative markets.

"In these years Borsa has established itself as a fundamental component of the country's financial infrastructure, making an important contribution on a regulatory and innovative services level," stated Angelo Tantazzi, Chairman of Borsa Italiana. "Even with their cyclicity, the stock exchanges are now an indispensable factor in a country's economy and over the years Borsa Italiana has assumed an increasingly significant role, becoming an important player at a national and international level, for the growth and development of the financial markets."

"Over the years, Borsa Italiana, now fifth in Europe and ninth in the world for capitalisation, has become increasingly known and appreciated throughout the national and international financial community," stated Massimo Capuano, President and CEO of Borsa Italiana. "The market has grown, brokers have improved their services, Italian financial institutions have significantly developed the investment banking activity, managed savings have grown very rapidly and the retail investors have become more sophisticated.

Today, Borsa Italiana is an important element in the national financial industry, ready to play a role on an international level. Borsa Italiana Spa currently controls a Group - going from 58 employees on 1 January 1998 to about 400 at the end of 2002 - formed of Monte Titoli, which operates as a central securities depository and settlement house, Cassa di Compensazione e Garanzia, responsible for the central counterparty service for contracts stipulated on the derivatives markets and guarantee Fund management for the stock market, BIt Systems, an ICT company in joint venture with SIA and Piazza Affari Gestione e Servizi, which manages the spaces of Palazzo Mezzanotte, the prestigious headquarters of Borsa Italiana.

The balance of the parent company Borsa Italiana Spa closed 2001 with a net profit of €34 million, up 218% on 1998 with a turnover of more than €140 million, up +83%. In 2001 the dividend went from €0.43 in 1998 to €1.80. Borsa Italiana, one of the leading European exchanges, also had the highest EBIT margin, +39.0% and the lowest costs-income ratio, with a value equal to 61.0%, in 2001.

In these first five years of activity, Borsa Italiana has given a big boost to the Italian stock exchange market: 139 new companies have been admitted since 1998, bringing the list to its historic high; capitalisation - despite the downturn in the last two years - has grown at an annual rate of 8% while the turnover of shares traded has grown annually by 29%. Overall share trading for 1998-2002 is in excess of €3,000 billion.

The efficiency of the Italian market is also highlighted by primary market's figures: in fact, in the five years €107 billion were raised through over 200 operations, whereas 111 take-over bids brought investors €77 billion.

Interest in the Italian financial market-place has also been activated by an expanding remote access network: the six intermediaries of 1998 became thirty at the end of 2002.

Thanks to innovation in microstructure, technology and new products, the Italian equity derivatives market is the fourth in Europe for notional turnover traded, in a context of growing international competition, while the covered warrants market - third for number of instruments listed - is number one in Europe for trades through the electronic systems. In particular, the standard contracts traded on IDEM have grown at an annual rate of 13% while the turnover of covered warrants, launched in 1998, rose at an annual rate of 44%.

Promotion of the equity culture - through events organised by Borsa Italiana in collaboration with industrial associations throughout Italy - has contributed to changing the mentality of entrepreneurs who now include listing as a factor in growth opportunities.

With the aim of increasing the level of services offered to its customers, Borsa Italiana has acquired, created and developed new companies, consolidating its own business system, and has rationalised the operative cycle and invested very heavily in technology: the Borsa Italiana Group is now structured in order to carry on a leading role in international competition."

Borsa Italiana has introduced to the stock market important regulatory innovations provided for by the European Market Model to ensure greater operational flexibility. Over the years, it has redefined the segmentation of markets, differentiating them in order to respond to the needs of the different issuers categories and gradually modified its own market regulations to ensure growth, liquidity and competitiveness.

In 1998 Borsa Italiana launched covered warrants, in 1999 it started Nuovo Mercato, in 2000 it began Trading After Hours and EuroMOT, introduced the new trading platform for the covered warrants market and launched the miniFIB. In 2001 it created the STAR segment, while in 2002 it launched the new technology platform for the derivatives market and introduced the IDEM stock futures and the ETFs.

To improve transparency of the markets, Borsa Italiana promoted the Code of Conduct for listed companies, introduced the discipline on internal dealing in the Italian context, and helped draw up the "Guide for information to the market", which integrates the legal and regulatory provisions with codes of conduct for improving the information of listed companies.

With the Network Information System (NIS), the telematic circuit created to promptly and safely disseminate price-sensitive information of listed companies to the public, Borsa Italiana guarantees a daily service with 335 links between issuers, press agencies, Consob (securities and exchange commission) and Borsa.

The Italian Exchange Academy (IEA), Borsa Italiana's training centre, has developed 150 education programs in the financial and managerial sphere, involving over 2,000 participants and helping to promote the market culture, while the Borsa Italiana site www.borsaitaliana.it has gradually established itself, thanks to its information products, as one of the leading Italian financial sites.

Milan, 7 January 2003