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FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT OCTOBER 2008MACEDONIAN STOCK EXCHANGEIvan SterievCEOIn 2007, the total turnover of theMacedonian Stock Exchange was a recordbreaking US$ 990 million, 4.5% higher thanthe combined turnover in 2005 and 2006.2007 was an extraordinary year for theMacedonian Stock Exchange (MSE). The totalturnover of the MSE was a record breakingUS$ 990 million. The turnover in 2007 is 4.5%higher than the combined turnover in 2005and 2006.More detailed analysis of the turnover showsthe quality level of the MSE performance in2007: trading in equities through BEST tradingsystem reached about US$ 683.7 million whichindicates 237% increment compared with thesame figure in the 2006. The total number oftransactions executed in 2007 (141.984)increased by 168% compared to 2006 and it isalmost equal with the number of transactionsperformed on the MSE during the previous 6years combined.At the end of the year 38 companies werelisted on the Official market with marketcapitalization of around US$ 2.7 billion, whichcompared with 43 companies listed at the endof 2006 with market capitalization of US$ 1.2billion means an increment of 122%. Until31 December 2005 all companies that fulfilllisting requirements were obliged to be listedon the MSE Official market, but since January2006, listing is on a voluntary base.The MSE index, MBI-10, started the year at3.812 points and then increased the highestlevel in the history of the MSE on 31 August2007 (10.057,77 points) and ended the year at7.740,79 points which indicates increment of109%. This is the third year in a row with anascending trend of the MBI-10 index (2.292,04points in 2005 and 3.702,54 points in 2006).During 2007 a few takeovers become effective,especially in the banking sector with theentrance of French, Icelandic and Bulgariancapital.By the end of the year four exchanges fromthe region (the Belgrade, Macedonian, Zagreband Ljubljana stock exchanges) signedMemorandum of Partnership. This documentwill contribute to closer cooperation in thepromotion of the regional market, internationalpromotion of regional issuers and productsand further development of regional products,services and members.FUTURE OUTLOOKFor the MSE 2007 was extremely successfulyear with extraordinarily high turnover; marketcapitalization was three times higher than 2006and the official stock index MBI-10 reached itshighest level ever.In 2008 the Macedonian securities market willbe more influenced by non-economic factors.Expectations that Macedonian admission inNATO will resolve positively, determination ofthe date for starting the negotiations with EU forMacedonian membership, as well as resolvingof Kosovo’s status of independence will havesignificant influence over the economy of thecountry and will influence future trends on thecapital market.In 2008 we expect that the presence of foreigninvestment funds, as well as appearance ofseveral new domestic funds will contribute tothe improvement of the demand side of thesecurities market.The MSE will promote a few changes andamendments in the Listing Rules that willintroduce higher standards for disclosure forthe companies on the Exchange Listings.Through various forms of cooperation with otherregional exchanges the MSE will be involved inthe processes of the promotion of regionalmarkets and international promotion of issuersand products in order to attract international aswell as regional investors.CONTACT INFORMATIONContact Name Mr. Milco KupevE-mail mse@mse.com.mkWebsite www.mse.com.mkPAGE 64