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FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT APRIL 2011
MONTENEGRO STOCK EXCHANGE
ECONOMIC AND POLITICAL DEVELOPMENTS
Political Information
Montenegro has continued to make progress
in addressing the political criteria. It has
improved its legal framework and has
strengthened its administrative and
institutional capacity. Regarding human rigts
and the respect for and protection of minority
groups, the legal and policy framework is
lergely in place and broadly corresponds to
European and international standards. The
institunional framework is largely adequate.
However, there are gaps in implementation in
all fields.
The main concerns relate to the following
areas: effectivenes of anti-discrimantion
policies, freedom of expression and
government relations with the civil society as
well as the situation regarding displaced
persons from Croatia, Bosnia and
Herzegovina and Kosovo. Furhermore,
Montenegro needs to intensify its efforts to
consolidate its rule of law, in particular in the
fight against corruption and organised crime,
which still remain a serious problem.
Montenegro plays a constructive role in
Maintaining regional stability and in fostering
good neighbourly relations with other
Western Balkan and EU countries.
The Prime Minister of Montengro Mr Milo
Djukanovic has steped down, and new Prime
Minister of Montenegro is Mr Igor Luksic, ex
Minister of finance in the Government of
Montenegro.
Business Environment:
The business environment in 2010 was
characterized by problems related to a lack
of liquidity, a lack of inancial resources, and
a slowdown in the Montenegrin economy.
The major laws that inluenced business,
which were adopted during the fourth
quarter, were Law on Excise, the Law on
Financing for Local Governments, the Labor
Law and changes in the level of the
minimum wage.
Macroeconomic Outlook:
The fourth quarter of 2010, at a
macroeconomic level, was the one in which
recovery from the inancial crisis was seen.
Inlation is still at a very low level, and in the
labour market only slightly positive trends
can be seen so far regarding any increases
in wages. Although a decrease was recorded
in comparison with the same period last year,
the FDI volume is at quite a high level
considering the absence of any major
privatization takeovers in 2010 (unlike those
seen in 2009).
Banking Sector:
Total bank assets amounted to EUR3,007.5
million at end-August 2010, EUR2,907.6
million at end-September and EUR2,917.6
million at end-October 2010. In comparison
with last year, total bank assets during these
three months were lower. Total bank deposits
amounted to EUR1,786.2 million at end-
October 2010, thus showing a month-toprevious-month
growth of 0.2%. At end-
September 2010, when compared with
August, the total amount of deposits had
decreased by 4.5%.
Privatization and Investments:
Montenegro still has not used all of its
potential for attracting new investment. There
are three big projects that lie ahead: the
construction of a highway, the construction
of hydropower plants on the River Moraca
and the construction of a new tourist resort
on the Lustica peninsula. Additionally, the
World Bank’s new strategy envisages a large
amount of credit support to Montenegro in
the areas of agriculture, health, higher
education and science, and in the
remediation of environmentally problematic
issues. EBRD and IFC also plan to inance
some large projects in Montenegro: a power
network upgrade, the construction of a
highway bypass in Podgorica and to make
improvements to the water supply system in
the municipality of Danilovgrad.
Economic Freedom:
According to the report ‘Economic Freedom
of the World’ published by the Heritage
Foundation and the Wall Street Journal,
Montenegro’s economic freedom score is
62.5, making its economy the 76th freest in
the 2011 index. Its score has decreased by
1.1 points since last year, primarily because
of an explosion of growth in government
spending. Montenegro ranks as 34 out of 43
countries in the European region, and its
overall score is above average in the world.
Capital Market:
The Montenegro Stock Exchange in
Montenegro began to operate as one in
January 2011 after a technical merger of the
Nex and the Montenegro Stock Exchange at
the end of December 2010. Following this
event, the NEX Stock Exchange ceased to
exist as a legal entity.
Montenegro Officially Becomes an EU
Candidate Country
On Friday, December 17th, 2010, at a twoday
summit in Brussels, the European
Council backed a recommendation made by
the European Commission to grant
candidate status to Montenegro. However,
this decision does not guarantee an easy
journey towards joining the Union, since no
date for the opening of membership talks
has been set yet. This is a signal that the
country, which has a population of just
630,000, needs to speed up reforms.
Montenegro is the ifth candidate country in
line for membership, together with Croatia,
Iceland, Macedonia and Turkey.
Information obtained from the Exchange.
Key Information Contacts
Securities Commission of Montenegro www.scmn.cg.yu
Central Depository Agency www.cda.cg.yu
Central Bank of Montenegro www.cb-cg.org
Ministry of Finance www.ministarstvo-finansija.cg.yu
Montenegro Statistical Office www.monstat.cg.yu
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