FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2010MACEDONIAN STOCK EXCHANGEIvan SterievCEOIn 2009 the MSE continued to upgrade itsoperations and rules and procedures toprovide improved service to marketparticipants, exchange members andinvestors.The repercussions of the world economiccrisis continued to affect the Macedonianeconomy and subsequently the Macedoniancapital market in 2009.The conditions of the Macedonian capitalmarket in 2009 were very complex. The totalturnover in 2009 was reduced for 45%comparing with 2008. Even the main MSEindex MBI10 registered annual growth of 31%the stock prices were at the level of June2006. The average daily turnover in the BESTsystem in December 2009 was around273,000 euros and was at the same level ason June 2005 and the market capitalization ofthe listed companies has fallen more than 72%compared to record levels in 2007. Theparticipation of foreigners in the purchase sideof the turnover in 2009 was about 15%.Considering these numbers, we can stressseveral main characteristics of the events ofthe Macedonian Stock Exchange in 2009 suchas reduced liquidity in the market, withdrawalor passivity of foreign portfolio investors,change of the market structure in terms oftypes of investors, making the stock marketwith a pronounced domination of the localretail investors.In 2009 the MSE continued to upgrade itsoperations and rules and procedures toprovide improved service to marketparticipants, exchange members andinvestors. MSE implemented changes in theListing Rules by which new higher standardsfor disclosure for the companies on theExchange Listings were introduced(appointment and publishing an investor’srelations person; more précised obligations forannouncing the buying/selling of shares by themembers of the Management and Supervisoryboard; the issuers are obliged to publish theSemi Annual Balance, the Annual report andthe financial plan for the ongoing period). MSEestablished a new version of the tradingsystem based on the new technologies. Thenew version will support FIX Protocol.Within the framework of the Memorandum ofPartnership signed between the exchanges inSoutheast Europe during the 2009 two roadshows took place (in Belgrade and in Vienna)where the top issuers and the capital marketsfrom the region were promoted in order toincrease the visibility of the regional capitalmarkets and to attract international investors.In the forthcoming period, the MSE focuswill be on the further development of theMacedonian Secondary Market to the extentthat it will be comparable to the modern andwell organized markets worldwide, as well ason increasing of its attractiveness, by creatingmechanisms, procedures and projects that willenhance the quality and the competitivenessof MSE services.HISTORY AND DEVELOPMENTThe Macedonian Stock Exchange was foundedon September 13, 1995 and commencedtrading on March 28, 1996, as a centralmarketplace for trading in securities and thefirst organized stock exchange in the history ofthe Republic of Macedonia. Its mission is toprovide attractive, efficient, transparent andsecure functioning of the organized secondarysecurities market in the Republic ofMacedonia. For its 13 year history, theMacedonian Stock Exchange has managed toestablish a sound market and informationinfrastructure and a cohesive legal andregulatory framework, as well as solid expertiseupon which the functioning of the Macedoniansecurities market is based.The MSE was founded as a not-for-profit jointstock company with founding capital of500,000 Euros. According to the legislation thatwas in force in 1996 the only eligible foundersof the MSE were banks and other financialinstitutions (saving houses and insurancecompanies). MSE initially had 19 members:13 banks, 3 saving houses and 3 insurancecompanies. Starting from June 20, 2001 (withthe amendments of the Securities Law), MSEstarted to operate on a for-profit basis, with afounding capital of 500,000 EUROs. MSEshareholders may be any legal and privatedomestic and foreign entity. Shareholdings perentity are limited up to 10% of the MSEoutstanding shares. All MSE members must belicensed for trading in securities by theMacedonian SEC. Only brokers, authorized bythe MSE members may trade in securities atMSE. MSE currently has 25 members - 18brokerage houses and 7 banks. Currently MSEhas 35 shareholders (brokerage houses,banks, legal entities and private investors).FUTURE OUTLOOKIn the forthcoming period, the MSE focus willbe on the further development of theMacedonian Secondary Market to the extentthat it will be comparable to the modern andwell organized markets worldwide, as well ason increasing of its attractiveness, by creatingmechanisms, procedures and projects that willenhance the quality and the competitiveness ofMSE services.The MSE plans for 2010:• Modernizing the Trading System -introduction of FIX Protocol;• Attraction of new listings on the OfficialMarket;• To increase visibility of the Macedonian StockExchange by providing more data-feeds tomore data vendors;• Either alone or through various forms ofcooperation with other regional exchangesMSE will be involved in the processes ofpromotion of its market and issuers andproducts in order to attract international as wellas regional investors.• Development and promotion of a newInternet Services for investors, financialanalysts and financial intermediaries, calledBESTNET ANALITICS which contains threemodules: Technical Analysis, FundamentalAnalysis and My Portfolio;• MSE will continue to increase the knowledgeof capital market participants, institutionalas well as retail investors, issuers and mediafor exchange traded products, trading,transparency, investor protection and corporategovernance – creating a special training center.PAGE 112
FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2010MACEDONIAN STOCK EXCHANGEOFFICIAL 6 MONTH STATISTICSUS$ millions# Shares millionsTotal Volume Average Daily Volume Total Volume Average Daily VolumeStocksJul-09 3.51 0.15 2.98 0.13Aug-09 3.20 0.17 0.19 0.01Sep-09 6.12 0.31 0.27 0.01Oct-09 13.02 0.65 0.46 0.02Nov-09 5.84 0.28 0.26 0.01Dec-09 5.27 0.25 0.32 0.02TOTAL 36.95 0.30 0.75 0.03BondsJul-09 2.19 0.10 1.55 0.07Aug-09 1.64 0.09 1.41 0.07Sep-09 2.40 0.12 2.02 0.10Oct-09 3.41 0.17 2.76 0.14Nov-09 2.86 0.14 2.26 0.11Dec-09 0.89 0.04 0.71 0.03TOTAL 13.38 0.11 10.70 0.09OtherJul-09 0.00 0.00 0.00 0.00Aug-09 0.00 0.00 0.00 0.00Sep-09 0.00 0.00 0.00 0.00Oct-09 0.00 0.00 0.00 0.00Nov-09 0.00 0.00 0.00 0.00Dec-09 0.00 0.00 0.00 0.00TOTAL 0.00 0.00 0.00 0.00MarketCapitalization(US$ millions)IndexMONTHLY STOCK VOLUME VS INDEX(US$ millions)StocksIndexMONTHLY MARKET CAPITALIZATION(US$ millions)Jul-09 782.67 2,435.36Aug-09 837.83 2,607.58Sep-09 996.84 3,101.88Oct-09 1,168.65 3,497.59Nov-09 1,023.95 2,964.98Dec-09 922.20 2,751.8814121086423,5003,0002,5002,0001,5001,0005001,2001,0008006004002000Jul Aug Sep Oct Nov Dec00Jul Aug Sep Oct Nov DecCONTACT INFORMATIONContact Name Ms. Elena Jakimovska E-mail mse@mse.com.mk Website www.mse.com.mkPAGE 113
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