Russia's war of aggression in Ukraine is affecting many capital markets.

The Vienna Stock Exchange is also affected.

Since the beginning of the year, the leading index ATX including dividends (ATX Total Return) has lost around a fifth of its value.

The ATX – calculated as a price index – developed in a similar way.

What is an advantage in times of upswing is now proving to be a disadvantage: the geographical proximity to Eastern Europe is evident for the small economy in the heart of the continent.

Michael Seiser

Business correspondent for Austria and Hungary based in Vienna.

  • Follow I follow

Austria is likely to grow at a slower pace beyond the middle of the decade.

From 2022 to 2026, the increase in economic output will be slowed down by half a percentage point on average, instead of 2.6 percent per year as assumed in November, only 2.1 percent per year in real growth now seems realistic, forecasts the Austrian institute for Economic Research (WIDO).

This means that Austria could also fall below the average for the countries in the euro area, if one takes into account their growth prospects according to the forecast by the International Monetary Fund (IMF).

Observers doubt that the sell-off mood for Austrian shares is justified.

Fritz Mostböck, chief analyst at Erste Group, considers the discount to be unjustified, since only a small number of companies are actually directly operationally affected by Ukraine and/or Russia.

However, these include the ATX heavyweights Raiffeisen Bank International and the petrochemical group OMV, as well as the insurance companies Uniqa and VIG as well as the technology supplier Andritz, the packaging specialist Mayr-Melnhof and the sugar group Agrana.

Roland Neuwirth, Manager of Advisory Flexible Funds, points out that Austria's Russia bias is not only manifested politically, but also through individual companies: "Whereas the Austrian market was still in the first third of the world stock exchanges until the beginning of the war,

Link of the energy and raw material supply

The focus is first and foremost on Raiffeisen Bank International (RBI), whose Russian and Ukrainian branches have largely fueled profits in recent years.

These profiteers are currently under enormous political and capital market ethical pressure.

Although RBI is already dealing with the spin-off of the Russian business, this branch is still extremely important for the EU and of course Austria, as this is one of the few remaining viable payment routes to Russia and Ukraine.

"So this is also an indispensable link to parts of the European energy and raw material supply and maybe also the financing of Ukraine," says the Viennese asset manager Wolfgang Matejka, Managing Director of Matejka & Partner Asset Management.

He also refers to Austria's fossil energy monopoly OMV.

The gas supply contracts with Russia are mostly long-term.

In recent years, you have made the oil and gas company a key partner in European energy policy.

That's over now.

The business model of OMV will be shaken in gas transit and the associated rising costs of replacement procurement.