FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT JUNE 2012
BANJA LUKA STOCK EXCHANGE
In 2011 the regular turnover increased by
42%, the total turnover by 141% and the
number of concluded transactions by 32%.
Milan Bozic
CEO
Introduction by Director
The previous year indicated some positive
trends in the Republic of Srpska securities
market, since the regular turnover increased
by 42%, the total turnover by 141% and the
number of concluded transactions by 32%. On
the other hand, the decline of Banja Luka Stock
Exchange general index (BIRS) by 8.3% and the
structure of turnover warns that recovery is a
lengthy process which implies implementation
of national strategy for the development of
capital market.
Interest in investing in shares remained at a low
level during 2011, given the great uncertainty
regarding the long-term impact of the crisis on
the companies’ financial results. A significant
share of the turnover was related to the
ownership consolidation in the companies,
with the exception of a few stocks that were
attractive to portfolio investors. Therefore, the
attention of investors was mainly focused on
bonds, which have taken precedence in the
structure of total turnover.
In 2011 we celebrated ten years since the
Banja Luka Stock Exchange (BLSE) has
been established and were reminded of over
750,000 closed transactions in this period
totaling to over 2.5 billion BAM of turnover and
of all implemented projects that have strongly
influenced the development of Republic of
Srpska capital market.
HISTORY AND DEVELOPMENT
• 15.07.1998 The adoption of the Law on
Securities provided the necessary legal
framework to establish the capital market of
the Republic of Srpska.
• 09.05.2001 Eight banks and one company
trading in securities signed the Contract that
established the Banja Luka Stock Exchange.
• 14.03.2002 The first trading session took
place.
• 20.08.2003 The first auction for state owned
capital took a place on the BLSE.
• 03.05.2004 BIRS – The Stock Exchange
Index of Republic of Srpska established.
• 01.08.2004 FIRS - The Investment Fund
Index of Republic of Srpska established.
• 17.09.2004 Full membership to FEAS.
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Treasury Bills
The establishment of T-bills market was the
most important result in 2011. The adequate
regulation was adopted in cooperation with the
Republic of Srpska Ministry of Finance in order
to have both primary and secondary T-Bills
market operated by the BLSE. The success of
the project was confirmed after four auctions
when it was subscribed BAM 88 million of
treasury bills with interest rates ranging from
2.48 to 4.10%.
The BLSE has developed technology solutions
that allowed, in addition to regular members of
the Stock Exchange, other institutional investors
to participate in the market.
Primary Market
A large number of public offerings of bonds
has significantly contributed to increase in the
total turnover. It was raised BAM 178.7 million
in 13 public offerings, an increase of over 540%
comparing with the previous year. For the first
time the Republic of Srpska issued bonds in
total amount of BAM 108.6 million. In five public
offerings companies raised BAM 58.5 million,
and seven municipalities issued bonds in the
amount of BAM 11.6 million.
Companies raised BAM 1.6 million in four
public offerings of shares.
New Technologies
During 2011 we have continued with the
development of software package for
• 20.03.2006 Introduction of continuous
trading in shares which fulfill the liquidity
criteria.
• 18-19.05.2006 First International Conference
of the BLSE.
• 29.01.2007 Correspondent membership to
WFE.
• 22.11.2007 Correspondent membership to
FESE.
• 07.03.2008 The first government bonds were
listed on the BLSE
• 24.06.2008 The BLSE real-time data started
to be distributed by the Bloomberg.
• 19.12.2008 First IPO in the history of BIH.
• 09.3.2009 New trading system (BST 2.4) that
supports FIX protocol was implemented.
• 04.08.2009 The BLSE real-time data
available via Thomson Reuters.
brokerage houses that incorporates front,
middle and back office activities. The software
package was successfully implemented in all
independent brokerage houses in the Republic
of Srpska, which now can offer their clients
direct market access through e-trading service
based on the FIX protocol.
We signed a contract with Montenegro Stock
Exchange on license transfer for this software
package thus creating for the first time a real
opportunity to integrate the brokerage houses
in the regional network that provides investors
access to regional markets.
An important breakthrough in the technology
was development of a system for T-Bills trading,
which will serve as the basis for developing an
integrated trading platform for money market
that will be established in 2012.
International Relations
There were several meetings on the linking the
stock exchanges in the region during 2011.
In cooperation with the USAID’s PFS project,
stock exchanges from the region agreed a
common platform that should serve as a basis
for future activities. The BLSE has proposed
that the future regional integration should be
based on regional brokerage houses network,
modeled on similar projects that have been
implemented in recent years in various parts of
the World. We presented our cooperation with
Montenegro Stock Exchange as a role model of
such networking in the region.
FUTURE OUTLOOK
In 2012 the BLSE plans to:
• Provide trading infrastructure and organize
money market,
• Attract first companies to list on the highest
market segment - List A
• Implement E-Broker trading application
developed by the BLSE at Montenegro SE
members which will enable easier cross-
border trading
• Strengthen efforts to promote the importance
of good corporate governance
• Provide teaching materials for high schools,
organize national financial markets students
competitions and trainings for high school
teachers,
• Increase international visibility of the BLSE by
broadening the number of the international
data vendors