FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT JUNE 2013
MONTENEGRO STOCK EXCHANGE
Continuous development of our market is
the basis of the future of the MSE.
Mr. Gojko Maksimovic
Acting CEO
The negative trends in Montenegrin capital
market continued into 2012. Compared to
2011, around 43% lower turnover is generated,
and similar situation is with the total amount of
transactions concluded. As the main factor for the
negative results achieved, there is currently poor
macroeconomic situation, both in Montenegro
and beyond, which left the effects primarly on
less money available for investments, both in the
retail and in the institutional sectors. In addition,
the Montenegrin capital market should continue
to be seen as an emerging market that is usually
labeled as a risky, which results in avoiding during
moments of recession, due to the reluctance of
HISTORY AND DEVELOPMENT
Montenegro Stock Exchange was established in
June 1993, pursuant to the Law on Money and the
Capital Market. The first shareholders of the Stock
Exchange were the Republic of Montenegro and
four banks from Montenegro:
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Montenegrobanka A.D. Podgorica;
Pljevaljska banka A.D. Pljevlja;
Beranska banka A.D. Berane;
Hipotekarna banka A.D. Podgorica.
After taking authority from Federal Commission of
Yugoslavia for the Securities and Financial Markets,
in December 2000, the Commission for Securities
of the Republic of Montenegro, has given, after
determining the fulfillment of all the necessary
preconditions, the Montenegro Stock Exchange
a business license. On 20 September 2001, six
Montenegrin financial institutions and Brokers
Business Association founded the New Securities
Exchange of Montenegro. Montenegro Stock
Exchange completed the final harmonization with
the Law on Securities Montenegro in 2004, which
led to a situation in which, until the end of 2010,
there were two stock exchanges operating. The
start of operations of the New Securities Exchange
of Montenegro is significant because for the first
time in Montenegro capital market transaction were
executing by electronic trading system.
investors and their seeking for the secure returns.
As a consequence of such a bad environment,
compared to the beginning of the year Montenegro
Stock Exchange has six members less (brokerage
firms). During the observed period, there was
a growth of companies’ index MONEX20 for
aproximatelly 3%. In the case of companies’ index,
if we take into consideration the dividends paid by
the companies that constitute the mentioned index,
the realized profit would be 7.05%. It should be
noted that compared to the previous years there
was a considerable improvement of the market
regulations by the implementation of new legal
regulations of the Montenegro Stock Exchange, which led to an increase in the level of companies’
transparency. Furthermore, major improvement
of technical infrastructure has enabled us
to introduce the online trading system by
implementing the new software - BrokerOffice. We
have to emphasize that during this year we have
achieved good results in terms of communication
with the Government of Montenegro that resulted
in issuance of government bonds. Successfully
completed emission represents a major step
ahead for our capital market, as we have proved
that we are becoming a place for successful
capital raising.
In the beginning of 2011, the two Montenegrin
stock exchanges were integrated, through
the merge of the New Securities Exchange of
Montenegro to the Montenegro Stock Exchange.
The first working day on the single Montenegro
Stock Exchange was 10 of January 2011. At
this moment, Montenegro Stock Exchange has
13 members. In overall shareholder structure
of the Montenegro Stock Exchange 12 financial
institutions from Montenegro participate with
approximately of 93% ownership. through the affirmation of private companies
(which have high amounts of annual revenues)
established as a limited liability companies, to their
transformation into joint stock companies. In this
way, the Montenegro Stock Exchange would get
its full role as a place of raising capital through
the formation of joint stock companies and also
would become available for the small and medium
enterprises, which their dissatisfaction towards
the expensive loans of commercial banks in
Montenegro are expressing for a longer time. The
big challenge for our capital market is the process
of Montenegro’s accession to the EU. Accordingly,
we will shortly have the changes of capital
market regulations and its harmonization with the
European legislation (MiFID regulation). We hope
that mentioned implementation of the European
laws will bring positive effects to our market. As our
main task we have to solve the problem of liquidity
in the market through creation of mechanisms of
“borrowing” shares (primarily pledged) and by
introduction of market-makers. Another key task
will involve improvements in regional cooperation
with other stock exchanges by means of possibility
of creating a common trading platform and on this
basis, at least the formation of “virtual” joint capital
market.
FUTURE OUTLOOK
It aims to Current situation in the capital market
stimulated our greater activity in the field of
permanent services improvement that we offered
as the best way to confront crisis. The following
years will be very challenging for us. We will try
to make a greater impact in order to increase the
number of financial instruments on Montenegro
Stock Exchange through more active role of
the Government, primarily in terms of rising the
number and volume of bonds emission, and
by implementation as well as the introduction
of treasury bills trading. This will be possible by
further transformation of certain governmental and
public enterprises into joint stock companies and
by introducing the sale of a part of the capital by
initial public offering (IPO). In addition, we expect
to increase the number of financial instruments
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