Download - FEAS xxx.fh9
Download - FEAS xxx.fh9
Download - FEAS xxx.fh9
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT MAY 2005<br />
SARAJEVO STOCK EXCHANGE<br />
Almir Begic<br />
President and CEO<br />
In year 2002 when the Sarajevo Stock<br />
Exchange (SASE) started operating no one<br />
thought we could make it. Today after three<br />
years of operations and the SASE’s<br />
continuous development of an efficient<br />
capital market that offers security to<br />
investors, we can proudly say in some<br />
market segments we are the leader in the<br />
region.<br />
During the past year the SASE has<br />
accomplished exceptional results. Four new<br />
brokerage houses were accepted for<br />
membership and the total number of the<br />
SASE members is now 17. The Official<br />
Market was created and 11 Privatization<br />
Investment Funds were listed there. The<br />
implementation of continuous trading, under<br />
HISTORY AND DEVELOPMENT<br />
The Sarajevo Stock Exchange (SASE) was<br />
founded in September of 2001 by eight<br />
brokerage houses and commenced trading<br />
on April 12 of 2002. The SASE is a central<br />
marketplace for securities trading in the<br />
Federation of Bosnia and Herzegovina.<br />
The SASE is a joint-stock company which,<br />
originally had eight founding members.<br />
According to the Securities Law, the SASE<br />
members can only be legal entities i.e.<br />
brokerage houses with headquarters in the<br />
Federation of Bosnia and Herzegovina<br />
whose sole activity is trading in securities.<br />
The SASE currently has 17 members, whose<br />
headquarters are spread around the<br />
Federation of Bosnia and Herzegovina, the<br />
majority being in the capital, Sarajevo.<br />
All members of SASE must be licensed for<br />
trading in securities by the Securities<br />
Commission of the Federation of Bosnia<br />
and Herzegovina. Only those brokers<br />
authorized by the SASE members, who have<br />
passed a broker’s exam, which tests their<br />
expertise in dealing in securities, are allowed<br />
to trade. The Securities Commission defines<br />
the manner and conditions for taking the<br />
exam and for revoking the license. A broker<br />
is required to hold a valid license issued by<br />
the Commission.<br />
Trading on the SASE is performed<br />
electronically through an order driven<br />
electronic trading system BTS (Stock<br />
Exchange System). BTS is a computer<br />
assisted information and trading system,<br />
PAGE 114<br />
Today after three years of operations the<br />
SASE’s continuous development of an<br />
efficient capital market that offers security<br />
to investors, we can proudly say in some<br />
market segments we are the leader in the<br />
region.<br />
the name of Multi Fixing Trading Schedule<br />
(MFTS), was introduced in the first quarter of<br />
2004 for most liquid securities. All these<br />
factors together with the increasing of the<br />
trading days from two to four and enabling<br />
investors to monitor trading in real time over<br />
the Internet contributed to the SASE’s market<br />
capitalization increase of almost 400% while<br />
Bosnian Investment Funds Index (BIFX) grew<br />
over 150% during the same period.<br />
The SASE is not achieving this growth alone.<br />
The reforms that the Council of Ministers is<br />
implementing; reconstruction of the business<br />
environment under the initiative of the Office<br />
of the High Representative, activities of the<br />
Capital Markets Council under the<br />
coordination of the Central Bank of Bosnia<br />
which enables remote entry, modification,<br />
halt and removal of orders, automated<br />
matching of orders and concluding trades,<br />
supervision of orders and trades, as well as<br />
survey of information on trading and on<br />
listed securities.<br />
In 2003 SASE joined the Stock Exchange<br />
Monitor, which is an informational platform<br />
of the Stock Exchanges in South Eastern<br />
Europe. At the moment, there are 8<br />
participating exchanges, which operate<br />
markets with more than 2,190 securities and<br />
more than 170 brokerage houses.<br />
At the beginning of 2004, trading at the<br />
SASE Official Market started and all 11<br />
Privatization Investment Funds were listed<br />
there. The Official Market is a higher level<br />
market where only securities that meet<br />
special conditions and are approved by the<br />
Securities Commission and SASE’s addition<br />
board can be listed there. Also in 2004, after<br />
two years of trading with only call auction<br />
trading system, continuous trading has been<br />
introduced at the SASE under the name<br />
Multi Fixing Trading Schedule (MFTS). Only<br />
the most liquid securities on the SASE have<br />
been transferred to MFTS.<br />
In conclusion, after only two years of<br />
operations market capitalization of SASE<br />
has reached over US$ 2.6 billion.<br />
and Herzegovina, and continuous<br />
cooperation with all capital market<br />
participants is of crucial importance for<br />
development of stable securities markets.<br />
With combined and coordinated efforts, the<br />
SASE is contributing to further development<br />
of the capital market and of Bosnia and<br />
Herzegovina as a whole.<br />
FUTURE OUTLOOK<br />
The SASE finished 2004 with excellent<br />
results. This trend is expected to continue in<br />
2005 together with grater market efficiency<br />
and better market transparency. SASE’s<br />
vision for 2005 is as follows:<br />
• introduction of first Investment Funds<br />
together with transformation of all<br />
Privatization Investment Funds into<br />
Investment Funds;<br />
• issue government securities by the<br />
Bosnian Central Bank which will activate<br />
trading platform for bonds on SASE;<br />
• list additional companies currently under<br />
privatization process;<br />
• enact new legislation by the Parliament<br />
enabling Net Settlement which will permit<br />
“day trading”;<br />
• create a portal to allow investors easier<br />
access to annual statements and other<br />
financial data of all companies listed on the<br />
SASE;<br />
• commence negotiation with companies<br />
and offer them listing privileges under the<br />
SASE Official Market; and<br />
• create the SASE’s Top 15 Companies<br />
Index.