Corporate control in Hungary

In this paper we describe the Hungarian legal framework regulating disclosure of information about listed firms at the Budapest Stock Exchange (BSE), and we analyze the concentration and types of blockholders at these firms for the years 1996-2000. Disclosure rules on the BSE became EU-compatible only very recently, and so far indirect holdings were not reported. The concentration of direct ownership is nonetheless rather high, the largest owner having 46.2 percent on average in May 2000. While this figure is similar to the corresponding levels in continental Europe, it is more unusual that the second and third largest blockholders also have large shares (on average 20.2 and 10.4 at the same date). Concentration was quite stable during 1996-1999, while it decreased somewhat in 2000. The most prevalent type of owner is foreign investor, which had over 50 percent of all blockholdings in 2000, although domestic private blockholders and the state are also present in a significant number of firms.