Download - FEAS
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FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT OCTOBER 2006<br />
BANJA LUKA STOCK EXCHANGE<br />
Milan Bozic<br />
CEO<br />
As a result of improvement of the financial<br />
disclosure, the participations of foreign<br />
institutional investors have significantly<br />
increased, which indicates the<br />
internationalization of the BLSE market.<br />
2004 was a year of significant improvement in<br />
the Banja Luka Stock Exchange (BLSE) market<br />
performance. BLSE obtained an important role<br />
in the transitional processes in Bosnia and<br />
Herzegovina. The most important results are<br />
related to an increase in turnover, which<br />
amounted to US$ 65.3 million, showing an<br />
increase of 50% in comparison with 2003.<br />
During 86 trading days in 2004 there were over<br />
80,000 transactions concluded, which is 300%<br />
more than in 2003. Significant progress was<br />
also made in regard to the structure of<br />
turnover. More than 45% of total turnover was<br />
achieved on the official market, which is a<br />
consequence of admitting to this market<br />
segment 3 companies and 13 Privatization<br />
Investment Funds (PIFs). Total market<br />
capitalization also increased from US$ 522.7<br />
million on December 31, 2003 to US$ 1.3<br />
billion on December 31, 2004. More than 60%<br />
of the above mentioned amount is related to<br />
the official market.<br />
During 2004, two BLSE indices were created.<br />
The Stock Exchange Index of The Republic of<br />
Srpska (BIRS), which includes 10 companies<br />
with the largest market capitalization, indicated<br />
an increase of 15% for an 8 month period.<br />
Total return on BIRS for this period was over<br />
20%. The Privatization Investment Funds Index<br />
(FIRS) includes 13 shares of Privatization<br />
Investment Funds (PIFs). FIRS increased from<br />
September 1st to December 31, 2004 by 85%.<br />
Positive growth indicates increasing investor’s<br />
interest and confidence in the BLSE, which is<br />
largely due to the BLSE’s promotional and<br />
educational activities.<br />
As a result of improvement of the financial<br />
disclosure requirements (Financial statements<br />
for PIFs are disclosed on a monthly basis), the<br />
participation of foreign institutional investors<br />
has significantly increased, which indicates the<br />
internationalization of BLSE market. We are<br />
especially proud of the increasing number of<br />
small local investors, which indicates the<br />
success of the BLSE in educational activities.<br />
This has not been an easy task, bearing in<br />
mind that almost all citizens had a reason not<br />
to believe in new things such as investing in<br />
capital markets, because of the frozen saving<br />
accounts issue.<br />
An important result during 2004 was<br />
participation in the privatization of more than<br />
60 state owned companies. Finally, the BLSE<br />
became a full member of <strong>FEAS</strong> in November<br />
2004.<br />
Note: Please note that there is a difference<br />
between BLSE reported numbers in the<br />
message from the CEO and the <strong>FEAS</strong> statistics<br />
based on auction for state owned capital and<br />
block transactions reported to BLSE which are<br />
not included in the <strong>FEAS</strong> statistics.<br />
HISTORY AND DEVELOPMENT<br />
15.07.1998 The adoption of the Law on<br />
Securities provided the necessary legal<br />
framework to establish the capital market of the<br />
Republic of Srpska.<br />
04.05.2000 The National Assembly of the<br />
Republic of Srpska appointed the first members<br />
of Republic of Srpska Securities Commission.<br />
26.02.2001 Established Central Registry of<br />
Securities.<br />
09.05.2001 Eight banks and one company<br />
trading in securities signed the Contract that<br />
established the BLSE.<br />
09.08.2001 Republic of Srpska Securities<br />
Commission issued working permit to the BLSE.<br />
29.11.2001 The first equity from the privatization<br />
program was registered in the Central Registry<br />
of Securities (CRHOV).<br />
05.03.2002 Signed contract on transfer of<br />
license between the Directorate for Privatization<br />
and the BLSE that provided BLSE with electronic<br />
trading system (BTS) developed by the Ljubljana<br />
Stock Exchange (LJSE).<br />
14.03.2002 The first BLSE trading session took<br />
place, involving six members that traded 20<br />
listed securities.<br />
12.11.2002 The BLSE purchased 7% of stocks<br />
of the Central Registry of Securities.<br />
12.09.2002 The law on takeover came into<br />
force.<br />
30.09.2002 The BLSE and the LJSE signed<br />
memorandum on cooperation and exchange of<br />
information.<br />
10.12.2002 A contract on regional cooperation<br />
in field of education and financial markets was<br />
signed at the Belgrade Stock Exchange.<br />
24.01.2003 The first session of the Listing<br />
Commission took place and stocks of 13<br />
Privatization Investment Funds admitted to the<br />
official market of the BLSE.<br />
11.02.2003 The first transactions concluded<br />
with shares of PIFs.<br />
24.04.2003 Shares of Telekom Srpske a.d.<br />
Banja Luka and Banjaluka pivara a.d. Banja<br />
Luka were listed on the free market of the BLSE.<br />
30.04.2003 Bobar Bank a.d. Bijeljina became<br />
10th member of BLSE.<br />
20.08.2003 The first auction for state owned<br />
capital took a place on the BLSE.<br />
23.09.2003 Shares of Rafinerija ulja a.d.<br />
Modrica were listed on the official market of<br />
BLSE as the first company listed on official<br />
market in BiH.<br />
30.10.2003 The BLSE presented Internet portal<br />
www.sem-on.net (project of exchange of<br />
information between seven Exchanges from the<br />
region).<br />
01.06.2004 The BLSE established BIRS,<br />
consisted of 9 companies and 2 banks.<br />
07.06.2004 First bond in BiH (Slateks Slatina)<br />
listed on the market of the BLSE.<br />
01.08.2004 The FIRS was introduced.<br />
FIRS included shares of 13 PIFs from Republic<br />
of Srpska.<br />
17.09.2004 On the 10th General Meeting of the<br />
<strong>FEAS</strong> held in Novigrad, Croatia, the BLSE was<br />
accepted in full membership of <strong>FEAS</strong>.<br />
30.05.2005 Shareholders Assembly of the Stock<br />
Exchange appointed new Managing and new<br />
Supervisory Board.<br />
03.10.2005 Continuous Trading Method<br />
introduced for shares listed on the official<br />
market of the BLSE.<br />
16.11.2005 Third regular revision of both<br />
indexes was made and structure of the indexes<br />
did not changed<br />
28.12.2005 Listing of Elektroprenos Banja Luka<br />
shares on the Free Market–the end of process<br />
of listing shares from the Power Utility System of<br />
the Republic of Srpska.<br />
29.12.2005 On the Banja Luka Stock Exchange<br />
recorded a new highest value on the amount of<br />
BAM at 60,532,673.<br />
20.03.2006 Introduction of continous trading in<br />
shares from the Free Market which fulfill the<br />
liqidity criteria<br />
17.05.2006 First International Conference of the<br />
Banja Luka Stock Exchange was held.<br />
FUTURE OUTLOOK<br />
In 2006 the BLSE plans to:<br />
• initialize creation of national corporate<br />
governance standards;<br />
• introduce new market instruments such as<br />
long term governments bonds issued on the<br />
basis of the frozen savings;<br />
• install a new web information portal, which will<br />
enable investors to access a large scope of<br />
data, such as the macroeconomic situation in<br />
Bosnia and Herzegovina, trading information,<br />
financial statements and ownership structure of<br />
the listed;<br />
• encourage listing of successful local<br />
companies on the official market;<br />
• continue with educational and promotional<br />
activities; and<br />
• further develop methods of continuous<br />
trading with listed securities.<br />
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