FEDERATION OF EURO-ASIAN STOCK EXCHANGES
SEMI ANNUAL REPORT OCTOBER 2006
SARAJEVO STOCK EXCHANGE
Zlatan Dedic
General Manager
The Sarajevo Stock Exchange (SASE)
continuous development of an efficient
capital market that offers security to investors
was carried into 2005 when SASE completed
its third year of operations.
During the past year SASE has
accomplished exceptional results. There are
several factors that contributed to an
increase in total turnover of over 176%. Two
new brokerage houses were accepted for
membership and the total number of SASE
members is now 16. On the Official Market,
where 11 Privatization Investment Funds
(PIFs) are listed, turnover has increased over
100%. In particular, this may have
contributed to the initiation of the
HISTORY AND DEVELOPMENT
The SASE was founded in September of
2001 by eight brokerage houses and
commenced trading on April 12 of 2002. The
SASE is a central marketplace for securities
trading in the Federation of Bosnia and
Herzegovina. The SASE is a joint-stock
company which, originally had eight
founding members. According to the
Securities Law, the SASE members can only
be legal entities i.e. brokerage houses with
headquarters in the Federation of Bosnia
and Herzegovina whose sole activity is
trading in securities.
The SASE currently has 17 members.
All members of SASE must be licensed for
trading in securities by the Securities
Commission of the Federation of Bosnia
and Herzegovina.
Trading on the SASE is performed
electronically through an order driven
electronic trading system BTS (Stock
Exchange System). BTS is a computer
assisted information and trading system,
which enables remote entry, modification,
halt and removal of orders, automated
matching of orders and concluding trades,
supervision of orders and trades, as well as
survey of information on trading and on
listed securities.
In 2003 SASE joined the Stock Exchange
Monitor, which is an informational platform
of the stock exchanges in South Eastern
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With the introduction of government bonds
under the coordination of the Central Bank
of Bosnia and Herzegovina, SASE will
continue contributing to further
development of the capital market.
transformation process in 2005 where all
PIFs are becoming Investment Funds.
Together with an increase in turnover of PIFs
there was an increase of over 23% in
Bosnian Investment Funds Index (BIFX),
which directly represents the price fluctuation
of PIFs.
The new listings of the state owned
companies currently under privatization
process continued in 2005 and contributed
in a market capitalization increase of over
72%. This increase in market capitalization
was followed with an increase in the Free
Market turnover of over 230% where the
most traded was the banking sector with
over 38% of the Free Market turnover.
Europe. At the moment, there are 8
participating exchanges, which operate
markets with more than 2,190 securities and
more than 170 brokerage houses.
At the beginning of 2004, trading at the
SASE Official Market started and all 11
Privatization Investment Funds were listed
there. The Official Market is a higher level
market where only securities that meet
special conditions and are approved by the
Securities Commission and SASE’s addition
board can be listed there. Also in 2004, after
two years of trading with only call auction
trading system, continuous trading has been
introduced at the SASE under the name
Multi Fixing Trading Schedule (MFTS). Only
the most liquid securities on the SASE have
been transferred to MFTS.
In conclusion, after only three years of
operations market capitalization of SASE
has reached over US$ 3.8 billion.
FUTURE OUTLOOK
The SASE expects that the excellent results
of 2005 will continue into the next year
together with accomplishment of greater
efficiency and transparency of the Capital
Market in the Federation of Bosnia and
Herzegovina. SASE future outlook for 2006
includes following activities:
• issuance of the government bonds by the
Central Bank of Bosnia and Herzegovina
which would activate SASE trading platform
for bonds.
All of these positive numbers are contributed
to high investor’s confidence in SASE. Our
internet portal which allows investors access
to annual statements and other financial data
for all companies listed on SASE together
with enabling investors to monitor trading in
real time over the Internet are attracting
international investors all over the world.
With the introduction of government bonds
under the coordination of the Central Bank of
Bosnia and Herzegovina, SASE will continue
contributing to further development of the
capital market and of Bosnia and
Herzegovina as a whole.
• continuing to list strategic companies
currently under privatization process on
SASE Free Market.
• undertaking steps toward unification of
the Capital Markets in Bosnia and
Herzegovina and increase SASE
participation in integrative processes of
central and southeast Europe.
• introduction and promotion of the Free
Market index under the name SASX-10
which would be formed from a top 10
companies on the SASE Free Market.
• introduction of first Investment Funds in
the Federation of Bosnia and Herzegovina.
• enactment of the new securities
legislation in the Federation of Bosnia and
Herzegovina which would together with the
new Securities Law in the Republic of
Srpska contribute to unification of the
Capital Markets in Bosnia and Herzegovina.
• improvement of the SASE internet portal
which allows investors easier access to
annual statements and other financial data
for all companies listed on SASE.
• presentation of privileges of the Official
Market to the most liquid companies of the
Free Market.
• organization of education seminars for
SASE members; and
• increase in transparency of Capital Market
and improvements in corporate governance
code in compliance with OECD
recommendations.