FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT APRIL 2009
BANJA LUKA STOCK EXCHANGE
In 2007 total market capitalization amounted
to EUR 4 billion, which is an increase of
3.86% compared to the end of 2006.
Milan Bozic
CEO
The capital markets of the Republic of Srpska
(RS) were very dynamic in 2007. The strong
growth in the first four months was followed by
the significant decrease of prices in the second
part of 2007. It should be noted that this
downward trend occurred after the six-year of
consecutive growth. The turnover amounted to
EUR 380 million, which is almost double as
compared to the previous year. For the first time,
the BLSE index (BIRS) recorded a decrease of
11.1%, ending at 2,564 points. Total market
capitalization amounted to EUR 4 billion, which is
an increase of 3.86% as compared to the end of
2006.
The general understanding about the strong
relationship between the capital market and
the real economy performance has been
considerably improved. At the same time,
HISTORY AND DEVELOPMENT
15 July 1998 The adoption of the Law on
Securities provided the necessary legal framework
to establish the capital market of the Republic of
Srpska.
04 May 2000 The National Assembly of the
Republic of Srpska appointed the first members of
Republic of Srpska Securities Commission.
26 February 2001 Established Central Registry of
Securities.
09 May 2001 Eight banks and one company
trading in securities signed the contract that
established the BLSE.
09 August 2001 Republic of Srpska Securities
Commission issued working permit to the BLSE.
29 November 2001 The first equity from the
privatization program was registered in the Central
Registry of Securities (CRHOV).
05 March 2002 Signed contract on transfer of
license between the Directorate for Privatization
and the BLSE that provided BLSE with electronic
trading system (BTS) developed by the Ljubljana
Stock Exchange.
14 March 2002 The first BLSE trading session
took place, involving six members that traded 20
listed securities.
12 September 2002 The Law on Takeover came
into force.
24 January 2003 The first session of The Listing
Commission took place and stocks of 10
privatization investment funds admitted to the
official market of the BLSE.
11 February 2003 The first transactions
concluded with shares of PIFs.
20 August 2003 The first auction for state owned
capital took a place on the BLSE.
23 September 2003 Shares of Rafinerija ulja a.d.
Modrica were listed on the official market of the
BLSE as the first company listed on official market
in BiH.
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significant improvements in the development of
the official market have been achieved resulting in
an increase in number of companies and funds
being listed on this market segment (40). For the
first time two bank bonds were listed on the
official market. 2007 saw the transformation of 13
privatization investment funds into close-ended
investment funds. The total market capitalization
of these funds reached EUR 240 million.
Furthermore, the first open ended fund has been
established in the RS, signaling a plausible
turning point in the development of the fund
industry. Corporate disclosure has been
significantly improved and for all companies listed
on the Banja Luka Stock Exchange (BLSE)
markets, semi-annual financial reports are
available on the BLSE web page and for
companies listed on the official market quarterly
reports are disseminated as well. In 2008, the first municipal and significant issues
of government bonds should be listed on the
BLSE markets. The launch of pension system
reforms will have a strong positive impact on the
RS capital market development. Announced
adoption of the Law on Reserve Pension Fund
and the Law on Third Pillar Pension Funds should
contribute to the strengthening of domestic
institutional demand on the Exchange. Through
active participation in various regional projects the
BLSE will strive to increase visibility of the RS
capital markets. The planed introduction of FIX
protocol in the second part of 2008 will improve
accessibility of the domestic markets to foreign
investors. Finally, 2008 will see the first limited
liability companies to raise capital on the
Exchange.
14 October 2003 Shares of VB bank a.d. Banja
Luka were listed on the official market of the BLSE.
03 May 2004 Stock Exchange Index of Republic
of Srpska established.
11 May 2004 Shares of Telekom Srpske were
listed on the official market of the BLSE.
01 August 2004 The Investment Fund Index of
Republic of Srpska (FIRS) established, including
the shares of 13 PIFs from the Republic of Srpska.
18 October 2004 The BLSE became full member
of the FEAS.
14 June 2005 Beginning of the process of listing
shares from Power Utility System of the Republic
of Srpska on the Free Market.
03 October 2005 Introduction of continuous
trading in securities on the Official Market (13
PIFs, Rafinerija ulja Modrica, Telekom Srpske i
LHB banka).
01 January 2006 Index of ten companies from
Electric Power System of Republic of Srpska -
ERS10 established.
17 May 2006 Information portal of the RS Capital
Market was established, created jointly by the
BLSE, Securities Commission and Central Registry
of Securities.
18-19 May 2006 First International Conference of
the BLSE was held, to observe BLSE fifth
anniversary.
30 June 2006 The BLSE and Wiener Borse
signed Cooperation Agreement in Vienna.
08 August 2006 For the first time, sale of shares
from Pension & Disability Insurance Fund’s
portfolio.
21 August 2006 Mr. Milan Bozic was re-elected
as a Director of the BLSE to a new four-year term.
05 December 2006 Government of Republic of
Srpska had accepted Telekom Srbija bid for
purchase of state-owned capital (65%) of Telekom
Srpska for EUR 646 million.
29 January 2007 The BLSE became a
correspondent member of the World Federation
of Exchanges. 17 May 2007 The second International Conference
of the BLSE took place on 17-18 May 2007.
06 June 2007 The first trading with bonds listed
on the official market (Balkan Investment Bank).
18 June 2007 Memorandum of Understanding
was signed between Hellenic Exchange and the
BLSE in Thessaloniki.
22 November 2007 The BLSE was granted
Corresponding Membership status with the
Federation of European Securities Exchanges
(FESE).
FUTURE OUTLOOK
In 2009 the BLSE plans to:
• foster implementation of national corporate
governance standards;
• introduce new market instruments on the
trading, such as long term government and
municipal bonds;
• encourage listings of successful limited liability
companies on the stock exchange market;
• further develop relations with the issuers listed
on the stock exchange and promote benefits of
listing on higher market segments;
• support to the development of open ended
funds through education and promotion of their
roles on the capital market
• increase visibility of the BLSE market by
providing data-feed to the world known
Vendors;
• promote cooperation with the stock
exchanges from the region and other part of the
World;
• continue with educational and promotional
activities (International Conference of the Banja
Luka Stock Exchange);
• introduce upgraded version of trading system
which will further improve flexibility of trading
and
• launch fix protocol.