JUNE 2013 - FEAS

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FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2013BELGRADE STOCK EXCHANGEstatus for the EU membership, with no date forbeginning of negotiations, significant positivedrive of this news lacked. Declining industrialproduction was mainly due to bad weatherconditions and extremely low temperaturescausing the problems in transport and electricitysupply. Poor performance in agriculture is themain reason for the inflation which risen sharplyinto double digits. Credit rating downgrade bythe Standard&Poor’s and change of outlooksfrom stable to negative by Fitch contributed tofurther depreciation of the local currency. In thesecond half of August came the ease to thedepreciation pressures and dinar recovered dueto the government moves (subsidized loans)and monetary policies measures. Changes tothe regulations on reserve unleashed a portionof foreign exchange funds, though the firstnine months saw a low level of bank lendingwith a high proportion of problematic loans tobusinesses and households in the total loans.These effects were immediately translated tocurrency movements and led to an appreciationin the last quarter.The region is still facing common problemof extremely low liquidity. Characteristic oflow liquidity are significantly distorted pricesof traded assets, and lack of confidence inmarket mechanism. Chronic lack of largeinstitutional investors and their crucial role inproviding liquidity and reducing volatility againbrought under the spotlight the issue of closercooperation and connectivity in the region.Though, making progress on the extensivestructural reform agenda still remains essentialfor unlocking Serbia’s growth potential.Key macroeconomic indicators*2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Q12012Q22012Q32012Real GDP growth (in %) 1) 4,3 2,5 9,3 5,4 3,6 5,4 3,8 -3,5 1,0 1,6 -2,3 -0,6 -2,5Consumer prices (in %, relative to the same montha year earlier) 2) 14,8 7,8 13,7 17,7 6,6 11,0 8,6 6,6 10,3 7,0 3,2 5,5 10,3NBS foreign exchange reserves (in EUR million) 2.186 2.836 3.104 4.921 9.020 9.634 8.162 10.602 10.002 12.058 11.073 10.161 9.833Exports (in EUR million) 3)8) 3.125 3.847 4.475 5.330 6.949 8.686 10.157 8.478 10.070 11.472 2.519 3.031 3.083- growth rate in % compared to a year earlier 16,0 23,1 16,3 19,1 30,4 25,0 16,9 -16,5 18,8 13,9 -2,6 5,2 3,2Imports (in EUR million) 3)8) -6.387 -7.206 -9.543 -9.613 -11.971 -16.016 -18.843 -13.404 -14.643 -16.627 -4.042 -4.323 -4.235- growth rate in % compared to a year earlier 27,2 12,8 32,4 0,7 24,5 33,8 17,7 -28,9 9,2 13,6 5,5 6,3 1,3Current account balance 4)8)(in EUR million) -671 -1.347 -2.620 -1.778 -2.356 -5.053 -7.054 -1.910 -1.887 -2.776 -1.177 -738 -546as % of GDP -4,2 -7,8 -13,8 -8,8 -10,1 -17,7 -21,6 -6,6 -6,7 -8,9 -17,0 -10,3 -7,5Unemployment according to the Survey (in %) 5) 13,3 14,6 18,5 20,8 20,9 18,1 13,6 16,1 19,2 23,0 25,5 / /Wages (average for the period, in EUR) 152,1 176,9 194,6 210,4 259,5 347,6 402,4 337,9 330,1 372,5 357,6 363,5 351,8RS budget deficit/surplus (in % of GDP) 6) -4,3 -2,6 -0,3 0,3 -1,9 -1,7 -1,7 -3,4 -3,7 -4,2 -7,1 -7,2 -4,0Consolidated fiscal result (in % of GDP) -1,8 -2,4 0,8 0,9 -1,9 -2,0 -2,6 -4,5 -4,7 -5,0 -7,3 -7,0 -4,2RS public debt, (external + internal, in % of GDP) 6)7) 72,9 66,9 55,3 52,2 37,7 31,5 29,2 34,7 44,5 48,7 52,0 56,0 55,1RSD/US$ exchange rate (average, in the period) 64,70 57,56 58,44 66,90 67,01 58,39 55,76 67,47 77,91 73,34 82,38 88,77 93,55RSD/US$ exchange rate (end of period) 58,98 54,64 57,94 72,22 59,98 53,73 62,90 66,73 79,28 80,87 83,31 92,15 88,94RSD/EUR exchange rate (average, in the period) 60,66 65,13 72,70 83,00 84,10 79,96 81,44 93,95 103,04 101,95 108,11 113,73 116,95RSD/EUR exchange rate (end of period) 61,52 68,31 78,89 85,50 79,00 79,24 88,60 95,89 105,50 104,64 111,36 115,82 115,03MemorandumGDP (in EUR million) 16.028 17.306 19.026 20.306 23.305 28.468 32.668 28.954 28.006 31.140 6.966 7.261 7.526*source: National Bank of Serbia1) At constant prices of previous year.2) Retail prices until 2006.3) Trade with Montenegro is registered within relevanttransactions as of 2003.4) In accordance with BPM 5, a portion of estimatedremittances was transferred from the financial accountto the current account.5) Source: Labour Force Survey, Statistical Office.6) Source: MoF for public debt and NBS for estimatedGDP.7) Gouverment securities at nominal value.8) As of 1 January 2010, the Statistical Office, accordingto UN recommendations, applies the general tradesystem which is a broader concept and includes allgoods entering/exiting the country’s economic territory,apart from goods in transit. The Statistical Officepublished comparable data for 2007, 2008 and 2009.Previous years are disseminated under a special tradesystem.9) NBS estimate.Notes: 1. Data are subject to corrections in line with theofficial data sources.Key Information ContactsNational Bank of Serbia www.nbs.rsSecurities and Exchange Commission www.sec.gov.rsCentral Securities Depository and Clearing House www.crhov.rsMinistry of Economy and Regional Development www.mfp.gov.rs/?change_lang=enCONTACT INFORMATIONContact Name Ms. Marija Babic E-mail marija.babic@belex.rs Website www.belex.co.rsPAGE 32
FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2013BUCHAREST STOCK EXCHANGELucian AnghelPresident of the Board of GovernorsBVB’s Board approved facilities intended tostimulate the listing of new companies onthe regulated market and on the alternativetrading system.1. Support the successful closing of thestate companies’ public offersDuring the first part of 2012, BVB designed andpublicly submitted the technical and operationaloffer for running public offers through BVB.Out of the announced privatization program,the secondary public offer for Transelectricawas the only finalized offer, but representeda real success. During the first stage, BVBcontributed to the promotion of the offer, byparticipating, along with the SPO syndicate,to a series of external dedicated roadshows,and by marketing the offer, through allaccessible national and internationalmeans. BVB answered to participants’ andinvestors’ requirements by upgrading its rulesand systems in order to comply with bestinternational practices, as well as by ensuringtransparency to the subscription process.Also, BVB got involved in regulatory activitiesand in activities of consultation of the mainstakeholders and representatives of theinvolved authorities, with a view to increasingthe chances of success for future offers. TheCooperation Memorandum with OPSPI wasextended, and conferences, seminars andworkshops were organized, having as topic thepublic offers executed via the stock exchange.2. List new companies on BVB andincrease the number of active investorsIn 2012, BVB continued its activities to attractnew private companies on the stock exchangeand to promote funding through the localcapital market. These activities were aimed atmonitoring the press, identifying and selectingpotential companies meeting the requirementsto be admitted to trading on the regulatedmarket or on the alternative trading systemmanaged by BVB, as well as at documentingon the selected potential companies andeconomic sectors within they operate, atorganizing meetings with such companies andfollow-up.BVB’s Board approved facilities intended tostimulate the listing of new companies onthe regulated market and on the alternativetrading system, both for issuers (exemptionfrom payment of the processing fee andthe fee for admission to trading), and forinitiating companies (maintaining the measureon granting an EUR 2,000 bonus to eachParticipant which brings an issuer for listingon the regulated market and EUR 500 bonusto each Participant which brings an issuer forlisting on the alternative trading system).Since the beginning of the last year,amendments to the BVB Code were operated,enabling the admission to trading on ATS ofcompanies originating from non-EU memberstates. After the approval by the NSC of thoseamendments, by the end of March 2012, thefirst 5 American companies started tradingon BVB’s ATS, their number increasing to11 during the year. Also, other 5 companiesoriginating from EU member states startedtrading on the ATS (the International Section),their number reaching 26 by end-2012. Also,the first Romanian company listed on ATSstarted trading on this market.BVB supported the companies intending tobecome listed on the ATS segment and thebrokers by preparing a set of recommendationsregarding the information to be included in thecompanies’ presentation documents for theirlisting on CAN-ATS.The promotion of the capital market amonginvestors was made by organizing andparticipating to some events as the “Actualityin business” conference, organized bydoingbusiness.ro, and “Entrepreneur, seekingfinancing” organized by Wall-Street.ro. Also,in 2012, “BVB Afterschool Investor” seminartook place, dedicated to the presentation ofthe financing through the capital market toRomanian SMEs.3. Develop capabilities, products andservices offered by BVB GroupLast year, BVB supported the developmentof the structured product segment, theaverage number of such instruments availableregistering a significant increase compared to2011. During 2012, a novelty element was thelaunching of the first bonus certificates issuedby Erste Bank. The same issuer also brought tothe market the first certificates having the E-miniS&P 500 futures contract as underlying asset.The development of the structured productsegment also benefited from SSIF Broker’sinitiative to join Erste Bank and RaiffeisenCentrobank in the process of designing suchinstruments, becoming the first Romanianissuer of structured products.BVB continued the steps started in 2011,by operating amendments to the BVB Coderelated to the implementation of a deal marketfor structured products, as well as a marketfor trading the redemption value relatedto individual issues of turbo certificate, intwo successive trading sessions, when the“knock-out” price corresponding to the issue inquestion is reached.2012 was also the year of launching the firstRomanian ETF - undertakings for collectiveinvestments in transferable securities admittedto trading on the regulated market, having asinvestment policy objective the tracking (fully orpartially) of BET index.BVB also supported mutual funds active inRomania, by building an investible index,namely the BET-BK index (Bucharest ExchangeTrading Benchmark Index), to be used byfund managers as reference index. BVBanswered this need by including BVB-listedforeign companies in the index structureand by implementing a calculation methodwhich reflects the legal requirements and theinvestment limits of the funds (the calculationof the index takes into consideration criteriarelated to liquidity and the weights of theincluded companies).Another object achieved last year is theextension of the applicability of the globalaccounting system and the non-pre-validationmechanism to all financial instruments admittedto trading on BVB’s regulated spot market,enabling consistency with mechanisms usedby developed capital markets, higher marketattractiveness and accessibility for brokers.With regard to the technological platform andmarket architecture, in 2012 BVB investedin the development of the infrastructure ofits own Data Center in compliance with therequirements of the NSC Instruction No2/2011, the ESMA-EMIR requirements andthe requirements of other standards in thefield. These investments reflect the needfor development and upgrading, taking intoconsideration the operating level reached byBVB in the last years, as well as the need toeliminate existing operating risks.BVB made efforts to develop the infrastructurewith a view to supporting public offers, bytaking measures involving:• flexibility, by configuring public offers incompliance with the prospectus approvedby the NSC and the technical protocolbetween BVB and the intermediary of thepublic offer (which may require ways ofdisseminating subscriptions in real-time,implementing various types of allocations,etc)PAGE 33
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