FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT APRIL 2011
MONTENEGRO STOCK EXCHANGE
Continuous development of our market is
the basis of the future of the MSE, a future
in which the MSE strongly believes.
Dejana Suskavcevic, MA
CEO
Actual events that marked the previous year
such as the global financial crisis, showed that
the strongest economy, at first developed and
stable market can be unpredictable and directly
affected by unforeseeable repercussions that
are progressive, breakneck speed reflect on all
branches of the economy including the
securities market. The key to success of any
activity, in our case, recovery of financial
markets lies in the synergy of all stakeholders
who participate in it, and synchronized activities
restore confidence of domestic and foreign
investors. Continued implementation and further
development of legislation pursuant EU and
developed markets through further tax relief and
benefits for participants in the financial markets,
particularly in the area of fund groups (pension
and investment funds), the constant promotion
of the domestic market as the individual
performances, and within region will choose
back investors. The period of stagnation stock
activity should certainly be used in the further
implementation and construction of corporate
culture within the company and market
introduction of new materials, derivatives and
short-term securities, which will be the first and
crucial step in the return of foreign investors in
our market. The period of recovery is not, and
HISTORY AND DEVELOPMENT FUTURE OUTLOOK
The MSE was set up in June 1993 pursuant to
the Act on Money and Capital Markets (1989).
The first founding members were the four
Montenegrin banks: Montenegrobanka a.d.
Podgorica, Pljevaljska banka a.d. Pljevlja,
Beranska banka a.d. Berane, Hipotekarna banka
a.d. Podgorica, and the Republic of
Montenegro, i.e. Montenegrin Agency for
Economic Restructuring and Foreign
Investments. Montenegro Stock Exchange Has Big Plans
for the Year Ahead...
It aims to raise the level of market liquidity and to
implement a new information system project,
funded by the government of Luxemburg. This is
expected to start soon. The project management
has been entrusted to the Luxemburg stock
exchange, while the technical implementation will
be carried out in cooperation with the Belgrade
Stock Exchange. The system has been designed
in accordance with world standards and
functions in all areas in accordance with MIFID,
which is of crucial importance to Montenegro as
future member of the European Union. Apart
from the implementation of the new system, it is
of vital importance for Montenegro to have the
Luxemburg stock exchange as its partner.
During the constitutional meeting held on
7 July 1997, the MSE harmonized its operations
with the Exchange through the exchange
operations and exchange intermediaries Act.
Another three banks and two insurance
companies joined the founding–members of the
Exchange: Podgoriaka banka a.d. Podgorica,
Jugobanka a.d. Podgorica, Niksicka banka a.d.
Niksic, Lovcen osiguranje a.d. Podgorica and
Swiss osiguranje a.d. Podgorica.
In order to increase its capital share, the MSE
issued additional shares, upon the approval of
the Federal Commission for Securities and
Financial Markets. The shares were subscribed
and paid for by several Yugoslav banks, as well
as the Federal Government.
In order to comply with The Law on Securities of
the Republic of Montenegro, the MSE issued a
third issue of shares. The importance of this
issue which was sold successfully with 100%
subscription was instrumental in the further
development of the capital market of
Montenegro because with the sale of this issue
10 new shareholders emerged as owners of the
MSE from banking sector, insurance companies
and private companies from all spheres of
economy. As of today, the MSE has 23
shareholders. The MSE moved to its new
premises in the new business district of the city.
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This is just one in a series of projects that have
been planned to take place through this
cooperation. This year’s plan also envisages
the development of a new index in cooperation
with the Vienna stock exchange, with which
Montenegroberza has already worked
successfully over a long period of time. This
index will be calculated and published at the
Vienna stock exchange and will consequently
directly expose companies in the index to
monitoring by world investors.
In addition to this, it has been planned that at
least one Montenegrin company should appear
in the index that includes FEAS countries, and
which will be calculated and published by the
world known index provider Dow Jones. It is also
intended to enrich the market with new material,
i.e. derivative securities, which will expand the
range of products on offer and will refresh the
market. Implementation of the project is planned
to take place with cooperation from European
agencies that are specialized in this segment of
the market.The first foreign listing in the market
will also be worked on through the IPO process.
will not be easy and fast, but according to
earlier experience, a proven, that after each rain,
the sun again in sight. From this crisis should
draw lessons not to repeat mistakes, and take
as long as possible with a positive balance. The
market will always exist, traders also, long-term
or short-term securities, futures options, swaps,
market and other material.
Montenegro Stock Exchange will continue to be
a locomotive for further development of the
Montenegrian securities market, its promoter,
and active participant of international
integration.
The Montenegroberza web site will be enriched
by increasing the quality of its reporting in terms
of data necessary for performing the analyses of
investments, particularly in risk management.
Some educational activities are also planned in
order to enrich knowledge regarding the
importance of corporate governance, and to
increase the number of companies that accept
the Corporate Governance Codex in
Montenegro. The corporate governance sector
is of vital importance in joint stock companies
and it is directly related to the stock exchange
market as it directly contributes to the protection
of shareholders' interests. Code of Corporate
Governance for Montenegro was formed in May
2009, as a result of cooperation between the
Montenegrin Stock Exchange and International
Finance Corporation (IFC).
Testing of a Scorecard methodology in
Montenegro
In cooperation of Montenegroberza and
International Financial Corporation (IFC) within
the project "Promotion of Corporate the testing
of a Scorecard methodology was carried out in
six companies. Montenegroberza supported
Governance in Montenegro” and recommended
this kind of testing to the listed compaies in
Montenegro. The code was accepted by five
listed companies, and not all of them tested the
actual level of application of standards. Six listed
companies agreed to test the actual level of
corporate governance: Plantaze JSC, Zeljeznicka
infrastruktura JSC, Zeljeznicki prevoz JSC,
Montecargo JSC, Pobjeda JSC and Zetatrans
JSC. IFC provided consultations for those
companies free of charge through in-house
workshops. Testing of scorecard methodology
gave some results and highlighted some
problems regarding the actual situation of
Corporate Governance in Montenegrin
companies. Scorecard show that the most
problematic areas were: supervision and control,
transparency, and Board of Directors (election of
members).