FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2010BELGRADE STOCK EXCHANGEGordana DostanicManaging DirectorDuring 2009, the BSE made intensiveefforts to motivate the Exchange membersto actively engage in the market-makingoperations.The movements at the Belgrade Stock Exchangein 2009 were considerably affected by movementson the global financial market. During the year, theinvestment activities diminished in terms of theturnover value due to an increased risk aversion.The total turnover at BSE during 2009 amountedto US$ 636.8m, a fall of 52% compared to theprevious year. In the same period, the averagedaily turnover also recorded a fall of around 52%.The effects of a significant decline in investmentactivities at BSE during the last year could not bealleviated due to the lack of a broader range offinancial instruments, above all debt instruments,(municipal and corporate bonds) which, as a rule,in the conditions of increased risks, enable anefficient restructuring of investment portfolios forthe purpose of minimizing the overall riskinvestment.During the first quarter, when the turbulences inthe global economy reached a peak, the indexdescribing the movement of the most liquid BSEshares BELEX15 hit its historic low of 347.46index points. In the same period, the investorsstarted to relax with the first signals that themeasures taken by the governments of G20countries could lead the world economy out of thecrisis. The same relaxation, slightly delayed, wasalso felt at the BSE. Thus, during 2009, BELEX15recorded an annual rise of 17.44%. On the lastday in 2009, the value of this index amounted to663.77 index points, still far below its base valueof 1,000.00 index points.During 2009, the BSE made intensive efforts tomotivate the Exchange members to activelyengage, in addition to their usual activities in thesecurities trading, in the market-makingoperations, for the purpose of enhancing marketliquidity, reducing the risk of an uncontrolled pricevolatility and successful establishment of pricesfor less liquid securities. The BSE entered 2009with only one market maker, but during the year,recognizing the importance of these activities andseeing the first positive effects on the market,three more members started performing marketmakingoperations.In order to enable the electronic order routingfrom the “backoffice“ applications of theExchange members into the BSE trading system,a special module FIXAPI (FIX ApplicationProgramming Interface) was developed enablingthe automatic transfer of orders from an Exchangemember to the BSE trading system BELEXFIX.In the second half of the year, the BSE launchedinto production its new internet presentation,which has the following advantages over theprevious version: it provides easier access tomore information, use of new development toolsenabling a more efficient development,maintenance and control of performances,modern design, faster web site search, etc.HISTORY AND DEVELOPMENTThe Belgrade SE was originally founded in 1894,on November 21, but the first transactions weremade in January 1895. The last trading sessionwas held on April 4, 1941. The Stock Exchangewas closed in 1953, and again refounded in 1989,as a “Yugoslav Capital Market”. In 1992, BelgradeSE officially got its name back. The key events inthe history are:• In September 2002 Republic of Serbia Bondstrading began;• In March 2004, remote trading was launched;• In September 2004, Belgrade SE achieved fullmembership in <strong>FEAS</strong>;• In October 2004 continuous trading of stockshas begun;• In November 2004 the Third InternationalConference was held. The 110 anniversary ofBelgrade SE celebrated;• In December 2004, BELEXfm index has beenlunched;• In February 2005, Belgrade SE became anassociate member of FESE;• In March 2005, BELEX.info service was lunched;• In May 2005 the data distribution via Data Feedhas begun;• In October 2005 the BELEX15 index has beenintroduced;• In November 2005 the Fourth InternationalConference “Preserving Integrity and Efficiency ofthe Capital Market” was held;• In January 2006 new website was launched;• In April 2006 various training courses started;• In April 2006 MoU signed with the IFC;• In November 2006 the Fifth InternationalConference was held;• In March 2007, SRX index (Serbian TradedIndex) launched by the Vienna SE;• In April 2007, the Belgrade SE launched its newgeneral equity index BELEXline, successor of theBELEXfm;• In April 2007, first company listed on thepremium Listing A – Tigar Corporation from Pirot;• In June 2007, BELEX 15 Open End - IndexCertificate issued and listed at the Frankfurt SEand Stuttgart SE;• In November 2007, Serbian stocks included infirst Balkan Blue-Chip index - DJ STOXX Balkan50;• In November 2007, VI International Conferencewas held;• In December 2007, ’Discobolos’ was rewardedto the Belgrade SE for applying new technologies;• In December 2007 the Memorandum ofPartnership was signed with exchanges from theregion;• In January 2008, ABN AMRO bought a licencefor BELEX15• In April 2008, the new trading system BELEXFIXwas launched;• in September 2008, first closed-end fund sharesadmitted to trading;• In November 2008, VII Annual Conference washeld;• In December 2008, first market maker in TIGRshares;• In May 2009, Third International Roadshow washeld in Belgrade;• In June 2009, three new market makers wereintroduced to the market;• In August 2009, new website was launched;• In September 2009, Luxembourg ForeignMinister Jean Asselborn visited the Belgrade SE;• In November 2009, SEE Regional CapitalMarkets Conference was held in Vienna;• In November 2009, VIII Annual Conference washeld;FUTURE OUTLOOKIn 2010 the BSE will work on the execution of thefollowing projects:• Upgrading of all operations, rules andprocedures to provide state-of-art service;• Introduction of the electronic order routing in theBSE trading system, BELEXFIX;• Launching of modern BSE Disaster recovery site;• Organization of international roadshows;• Further development of the existing indexes andindicators;• Continuous motivation of the best Serbiancompanies to apply for Official Listing;• Further development of market segmentation bycreating new segments and improving the existingones;• Development of sector classification in line withthe leading global standards;• Market liquidity boosting through automation ofthe market-making function;• Exploring the possibilities of introducing newinstruments into the market;• Promotion of news on listed companies throughdirect cooperation with media and news agencies;• A reduction in the transaction costs and taxes incooperation with other capital market institutionsand state bodies;• Broadening the network of international datavendors;• Work on promotion of importance of corporategovernance among issuers;• Educational activities with the existing and newtraining programs;• Improvement of media coverage of stockexchange activities;• Editing and publishing of new editions andpublications;• Work on developing human resources;• Organization of the annual 9th InternationalConference in November.PAGE 68
FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2010BELGRADE STOCK EXCHANGEOFFICIAL 6 MONTH STATISTICSUS$ millions# Shares millionsTotal Volume Average Daily Volume Total Volume Average Daily VolumeStocksJul-09 12.38 0.54 0.87 0.04Aug-09 17.07 0.81 0.89 0.04Sep-09 34.42 1.56 1.25 0.06Oct-09 23.72 1.08 1.54 0.07Nov-09 51.96 2.47 1.77 0.08Dec-09 289.49 12.59 3.49 0.15TOTAL 429.03 3.18 9.83 0.07BondsJul-09 5.28 0.23 4.88 0.21Aug-09 6.62 0.32 5.49 0.26Sep-09 4.64 0.21 4.05 0.18Oct-09 4.68 0.21 3.81 0.17Nov-09 3.10 0.15 2.47 0.12Dec-09 5.56 0.24 4.51 0.20TOTAL 29.88 0.23 25.21 0.19OtherJul-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 11,400.99 570.25Aug-09 12,030.30 710.80Sep-09 12,779.54 825.97Oct-09 12,749.80 806.19Nov-09 12,206.77 681.24Dec-09 11,521.56 663.77CONTACT INFORMATION300250200150100500900 14,00080012,00070060010,000500 8,000400 6,0003002004,0001002,00000Jul Aug Sep Oct Nov Dec Jul Aug Sep Oct Nov DecContact Name Ms. Svetlana Cerovic E-mail svetlana.cerovic@belex.co.yu Website www.belex.co.yuPAGE 69
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