FEAS Yearbook FEAS Yearbook 2009 | Page 50

FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT APRIL 2009 BELGRADE STOCK EXCHANGE The psychological impact on the domestic investor was such that his fears could not be alleviated by the good news and good financial results. Gordana Dostanic Managing Director The issue of the utmost importance to businessmen, politicians and analysts in recent months, in both the global and Serbian markets, has been the establishment of efficient measures for overcoming the crisis spreading throughout the financial world and heading for the real sector. Let me confine my focus on the effects of the crisis on the Serbian capital market. Do the American mortgage crisis, crash of the Lehman Brothers, financial giants’ losses and firing of one-time yuppies have anything to do with our market if we do not have structured finance, trading in dubious derivatives with AAA ratings, hidden „bombshells“ in the investment banks’ balances, not even the investment banks themselves? Very much so, I dare say, however hasty it might sound. HISTORY AND DEVELOPMENT Belgrade SE, originally founded in 1894, was closed in 1953, and again refounded in 1989. The key events in the latest history are: • In September 2002 Republic of Serbia Bonds trading began; • In March 2004, remote trading was launched; • In October 2004 continuous trading of stocks has begun; • In December 2004, BELEXfm index was launched; • In October 2005 the BELEX15 index has been introduced; • In March 2007, SRX index launched by the Vienna SE; • In April 2007, the Belgrade SE launched BELEXline, successor of the BELEXfm; • In April 2007, first company listed on Prime Market – Tigar Corporation from Pirot; • In June 2007, BELEX 15 Open End - Index Certificate issued and listed at the Frankfurt SE and Stuttgart SE; • In November 2007, Serbian stocks included in first Balcan Blue-Chip index - DJ STOXX Balkan 50; • In January 2008, ABN AMRO bought a licence on BELEX15; PAGE 48 In previous years share turnover on the Belgrade Stock Exchange went up with a significant contribution of foreign investors, although their participation in turnover was slightly changed in 2007, with enhanced appearance of domestic institutional investors. High exposure to foreign investors and consequently high exposure to the impact of global events, even when the „local“ is not directly linked to the „global“, is one of the major reasons for decreasing trends on the Belgrade Stock Exchange in 2008. In the period January – November 2008 the Belgrade Stock Exchange recorded the turnover of RSD 67.9 b, i.e., over EUR 837.9 m, which is by 56% lower compared to the same period last year. The total market capitalization on 30th November 2008 amounted to EUR 10.3 b, which is by 35.8% lower as against the same period last year. The index of the most liquid shares on the Belgrade Stock Exchange BELEX15 fell over 70% up to November 2008. • In April 2008, the new trading system BELEXFIX was launched; • in September 2008, first closed-end fund shares admitted to trading; • In December 2008, first market maker in TIGR shares. • Work on the project of autonomous filing and updating of all documents, news, and announcements for issuers; • Modify BELEXFIX application and test client applications; • Improve BELEX.info and other real-time applications; • Broaden network of international data vendors; • Work on promotion of importance of corporate governance among issuers; • Continue educational activities with the existing and new training programs; • Improve media coverage of stock exchange activities; • Edit and publish new editions and publications; • Continue work on developing human resources; • Take active part in international meetings and events; • Organize the 8th International Annual Conference in November. FUTURE OUTLOOK In the 2009 the BSE will: • Upgrade all operations, rules and procedures to provide state-of-art service; • Organize first Regional Roadshow in Belgrade in May; • Continue promotion of stock exchange operations through roadshows outside the country, • Further develop the existing indexes and indicators; • Further motivate the best Serbian companies to apply for Official Listing; • Further develop market segmentation by building new and improving the existing ones; • Develop sector classification in line with the leading global standards; • Develop new market making functionalities; • Explore possibilities for introducing new instruments to the market; • Promote news on listed companies through direct cooperation with media and news agencies; General characteristics of the Serbian capital market (level of capitalization, quality and range of products, unharmonized legislation not designed to prompt the capital market growth, etc. and frequent political tensions raising the investment risk, additionally contributed to the scarcity of mechanisms for slowing down the fall of the index BELEX15. The psychological impact on the domestic investor was such that his fears could not be alleviated by the good news and good financial results of the companies, not even by the fact that the companies traded on the Belgrade Stock Exchange in most cases have no connections whatsoever with the causes of the world crisis.