FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT JUNE 2013
MONTENEGRO STOCK EXCHANGE
CAPITAL MARKET DEVELOPMENT
AND ECONOMIC OUTLOOK
After record revenues, number of concluded
transactions and the amount of market
capitalization, the Montenegrin capital market,
in the period after the investment boom from
2007, shows negative trends in terms of the
market liquidity. That the market is subject to
a period of stagnation and high reluctance of
investors can also be concluded by observing
the movement of the index in the last three
years. The main factor that led to significantly
worse results is the poor macroeconomic
situation, both in Montenegro and beyond,
leaving effects, primarily in terms of less money
available for investment in the retail sector
and among institutional investors. In addition,
the Montenegrin capital market should still be
seen as an “emerging market”, usually seen
as risky, which leads to avoidance in the times
of recession, due to the reluctance of investors
seeking safe yields.
According to credit agencies’ estimates,
Montenegro currently has the following credit
ratings:
• Ba3 (with stable outlook) - by credit agency
Moody’s (confirmed in May 2013).
• BB- (with stable outlook) - by credit agency
Standard and Poor’s confirmed in June
2013).
According to the report “Economic Freedom of
the World in 2013” published by the Heritage
Foundation and the Wall Street Journal,
Montenegro’s economic freedom score is 7,26,
making its economy the 49th freest.
Bad macroeconomic situation in Montenegro
is caused largely by external economic
factors and the influence of global economic
crisis. The main characteristics of the current
macroeconomic situation in Montenegro are:
slowing economic growth (expressed by a
significant drop in GDP) and increase in the
level of tax and other debts in the economy,
resulting in a significant increase in the level of
government debt in relation to the GDP level.
The current macroeconomic situation is also
characterized by stagnation in credit activities of
the banking sector which is directly caused by
large amounts of bad loans (approved primarily
in the period of investment boom).
Incentives for improving the macroeconomic
environment and the overall situation can be
expected with the completion of announced
major infrastructure projects in the sector
of providing services. The start of official
negotiations on accession to the European
Union presents a significant step in terms of
achieving macroeconomic stability (through
the provision of better sources of financing
and the government’s debt consolidation) and
through the harmonization and implementation
of European legislation, which is a significant
argument in the process of attracting foreign
Key Information Contacts
Securities Commission of Montenegro www.scmn.me
Central Depository Agency www.cda.me
Central Bank of Montenegro www.cb-mn.org
Ministry of Finance www.mf.gov.me
Montenegro Statistical Office www.monstat.org
CONTACT INFORMATION
Contact Name Ms. Suzana Drincic
PAGE 74
E-mail [email protected]
Website www.mnse.me
investors and fostering further growth through
the realization of foreign direct investments.
The real growth rate of GDP in the first quarter
of 2013 compared with the same period in 2012
was positive, i.e. it amounted 4,3%. (Source:
Central Bank of Montenegro, Ministry of Finance
of Montenegro, Statistical Office of Montenegro
- Monstat)