The Vienna Stock Exchange is among the ten best stock exchanges in the world in 2025, a remarkable and, interestingly, unfortunately, little-noticed development in the media. The domestic capital market is unfortunately not as much in the spotlight. Moreover, it seems to be an Austrian trait to complain when things go wrong. The trait of being happy when things go well is less prevalent.
What is driving the comeback? The domestic economy. NO. Domestic politics. NO. It is a fundamental misunderstanding in an export-oriented and global world to draw conclusions about the economic situation of a state based on the domestic stock market of a state. And in Vienna, this is a particularly misunderstanding. The domestic investors are not strong or large enough to move the market. All analyses, such as daily trading volumes or the proportion of free float, show that international investors play a key role. Experienced stock market traders know that international capital flows are at least as important as fundamentals and valuations.
2025 has brought two significant new developments so far. Over the past ten years, global capital flows have been primary focused on the US stock markets, resulting in years of significant outperformance by US stocks. Furthermore, capital flows were entirely concentrated on powerful large corporations; mid- and small-cap companies were little to not in demand at all.
In 2025, the wind will change; more money will flow to Europe again, and more money will flow into smaller-cap companies. And with that, more money will flow to Austria again, without any substantial changes having occurred domestically.
The second major new development, and the surprise of the year, is Germany. In our annual outlook, we had hoped for a more relaxed approach by Germany regarding the debt brake. That this would turn into a debt boost in March was beyond our imagination. While the timeline for investments may be too optimistic, the trend has been established, and the message is clear. Austria will also benefit from Germany's improved economic outlook from 2026 onwards.
This creates further solid development of Austrian equities. Valuations are still below the European average, while dividend yields are above it. Companies like Strabag and Palfinger are clear beneficiaries of German infrastructure investments. OMV, together with its Arab partners, will build a global chemical giant in the coming years. DO & Co have been writing an impressive growth story for years, and stocks like Andritz and Wienerberger have stood for corporate quality for years anyway. It remains to be hoped that, if the positive development continues, media interest will also reflect this.
Author:
Alois Wögerbauer
Managing Director 3 Banken-Generali Investment-Gesellschaft m.b.H.
1 July 2025
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Note
Wiener Börse AG would explicitly like to point out that the data and calculations given in this report are historic values, which do not permit any conclusions as regards future developments or value stability. Price fluctuations and loss of capital are possible in securities trading. The contribution is the personal opinion of the analyst and does not constitute a financial analysis or a recommendation for investment by the exchange operating company, Wiener Börse AG.