FEAS Yearbook FEAS Yearbook 2012 | Page 36

FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2012 BANJA LUKA STOCK EXCHANGE In 2011 the regular turnover increased by 42%, the total turnover by 141% and the number of concluded transactions by 32%. Milan Bozic CEO Introduction by Director The previous year indicated some positive trends in the Republic of Srpska securities market, since the regular turnover increased by 42%, the total turnover by 141% and the number of concluded transactions by 32%. On the other hand, the decline of Banja Luka Stock Exchange general index (BIRS) by 8.3% and the structure of turnover warns that recovery is a lengthy process which implies implementation of national strategy for the development of capital market. Interest in investing in shares remained at a low level during 2011, given the great uncertainty regarding the long-term impact of the crisis on the companies’ financial results. A significant share of the turnover was related to the ownership consolidation in the companies, with the exception of a few stocks that were attractive to portfolio investors. Therefore, the attention of investors was mainly focused on bonds, which have taken precedence in the structure of total turnover. In 2011 we celebrated ten years since the Banja Luka Stock Exchange (BLSE) has been established and were reminded of over 750,000 closed transactions in this period totaling to over 2.5 billion BAM of turnover and of all implemented projects that have strongly influenced the development of Republic of Srpska capital market. HISTORY AND DEVELOPMENT • 15.07.1998 The adoption of the Law on Securities provided the necessary legal framework to establish the capital market of the Republic of Srpska. • 09.05.2001 Eight banks and one company trading in securities signed the Contract that established the Banja Luka Stock Exchange. • 14.03.2002 The first trading session took place. • 20.08.2003 The first auction for state owned capital took a place on the BLSE. • 03.05.2004 BIRS – The Stock Exchange Index of Republic of Srpska established. • 01.08.2004 FIRS - The Investment Fund Index of Republic of Srpska established. • 17.09.2004 Full membership to FEAS. PAGE 34 Treasury Bills The establishment of T-bills market was the most important result in 2011. The adequate regulation was adopted in cooperation with the Republic of Srpska Ministry of Finance in order to have both primary and secondary T-Bills market operated by the BLSE. The success of the project was confirmed after four auctions when it was subscribed BAM 88 million of treasury bills with interest rates ranging from 2.48 to 4.10%. The BLSE has developed technology solutions that allowed, in addition to regular members of the Stock Exchange, other institutional investors to participate in the market. Primary Market A large number of public offerings of bonds has significantly contributed to increase in the total turnover. It was raised BAM 178.7 million in 13 public offerings, an increase of over 540% comparing with the previous year. For the first time the Republic of Srpska issued bonds in total amount of BAM 108.6 million. In five public offerings companies raised BAM 58.5 million, and seven municipalities issued bonds in the amount of BAM 11.6 million. Companies raised BAM 1.6 million in four public offerings of shares. New Technologies During 2011 we have continued with the development of software package for • 20.03.2006 Introduction of continuous trading in shares which fulfill the liquidity criteria. • 18-19.05.2006 First International Conference of the BLSE. • 29.01.2007 Correspondent membership to WFE. • 22.11.2007 Correspondent membership to FESE. • 07.03.2008 The first government bonds were listed on the BLSE • 24.06.2008 The BLSE real-time data started to be distributed by the Bloomberg. • 19.12.2008 First IPO in the history of BIH. • 09.3.2009 New trading system (BST 2.4) that supports FIX protocol was implemented. • 04.08.2009 The BLSE real-time data available via Thomson Reuters. brokerage houses that incorporates front, middle and back office activities. The software package was successfully implemented in all independent brokerage houses in the Republic of Srpska, which now can offer their clients direct market access through e-trading service based on the FIX protocol. We signed a contract with Montenegro Stock Exchange on license transfer for this software package thus creating for the first time a real opportunity to integrate the brokerage houses in the regional network that provides investors access to regional markets. An important breakthrough in the technology was development of a system for T-Bills trading, which will serve as the basis for developing an integrated trading platform for money market that will be established in 2012. International Relations There were several meetings on the linking the stock exchanges in the region during 2011. In cooperation with the USAID’s PFS project, stock exchanges from the region agreed a common platform that should serve as a basis for future activities. The BLSE has proposed that the future regional integration should be based on regional brokerage houses network, modeled on similar projects that have been implemented in recent years in various parts of the World. We presented our cooperation with Montenegro Stock Exchange as a role model of such networking in the region. FUTURE OUTLOOK In 2012 the BLSE plans to: • Provide trading infrastructure and organize money market, • Attract first companies to list on the highest market segment - List A • Implement E-Broker trading application developed by the BLSE at Montenegro SE members which will enable easier cross- border trading • Strengthen efforts to promote the importance of good corporate governance • Provide teaching materials for high schools, organize national financial markets students competitions and trainings for high school teachers, • Increase international visibility of the BLSE by broadening the number of the international data vendors