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FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2010MONTENEGRO STOCK EXCHANGEContinuous development of our market isthe basis of the future of the MSE, a futurein which the MSE strongly believes.Dejana Suskavcevic, MACEOActual events that marked the previous yearsuch as the global financial crisis, showedthat the strongest economy, at firstdeveloped and stable market can beunpredictable and directly affected byunforeseeable repercussions that areprogressive, breakneck speed reflect on allbranches of the economy including thesecurities market. The key to success of anyactivity, in our case, recovery of financialmarkets lies in the synergy of allstakeholders who participate in it, andsynchronized activities restore confidence ofdomestic and foreign investors. Continuedimplementation and further development oflegislation pursuant EU and developedmarkets through further tax relief andbenefits for participants in the financialmarkets, particularly in the area of fundgroups (pension and investment funds), theconstant promotion of the domestic marketas the individual performances, and withinregion will choose back investors. The periodof stagnation stock activity should certainlybe used in the further implementation andconstruction of corporate culture within thecompany and market introduction of newmaterials, derivatives and short-termsecurities, which will be the first and crucialstep in the return of foreign investors in ourmarket. The period of recovery is not, andwill not be easy and fast, but according toearlier experience, a proven, that after eachrain, the sun again in sight. From this crisisshould draw lessons not to repeat mistakes,and take as long as possible with a positivebalance. The market will always exist, tradersalso, long-term or short-term securities,futures options, swaps, market and othermaterial.Montenegro Stock Exchange will continue tobe a locomotive for further development ofthe Montenegrian securities market, itspromoter, and active participant ofinternational integration.HISTORY AND DEVELOPMENTThe MSE was set up in June 1993 pursuantto the Act on Money and Capital Markets(1989). The first founding members were thefour Montenegrin banks: Montenegrobankaa.d. Podgorica, Pljevaljska banka a.d.Pljevlja, Beranska banka a.d. Berane,Hipotekarna banka a.d. Podgorica, and theRepublic of Montenegro, i.e. MontenegrinAgency for Economic Restructuring andForeign Investments.During the constitutional meeting held on7 July 1997, the MSE harmonized itsoperations with the Exchange through theexchange operations and exchangeintermediaries Act. Another three banks andtwo insurance companies joined thefounding–members of the Exchange:Podgoriaka banka a.d. Podgorica,Jugobanka a.d. Podgorica, Niksicka bankaa.d. Niksic, Lovcen osiguranje a.d.Podgorica and Swiss osiguranje a.d.Podgorica.In order to increase its capital share, theMSE issued additional shares, upon theapproval of the Federal Commission forSecurities and Financial Markets. The shareswere subscribed and paid for by severalYugoslav banks, as well as the FederalGovernment.In order to comply with The Law onSecurities of the Republic of Montenegro,the MSE issued a third issue of shares. Theimportance of this issue which was soldsuccessfully with 100% subscription wasinstrumental in the further development ofthe capital market of Montenegro becausewith the sale of this issue 10 newshareholders emerged as owners of theMSE from banking sector, insurancecompanies and private companies from allspheres of economy. As of today, the MSEhas 23 shareholders.The MSE moved to its new premises in thenew business district of the city.FUTURE OUTLOOKIn 2010, Montenegro Stock Exchange hasfollowing Plans:• To get first short term securities issued bycompanies;• To start with implementation of Projectinvolving Derivative securities onMontenegrian stock market;• To organize the Third Annual Conference,• To organize several Training Programmerelated to the Corporate Governance Code,together with IFC;• Following the Decision of the GeneralShareholders meeting, the MNSE will mergewith another Montenegrin exchange.PAGE 124