FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT JUNE 2012
MONTENEGRO STOCK EXCHANGE
Continuous development of our market is
the basis of the future of the MSE, a future
in which the MSE strongly believes.
Mr. Gojko Maksimovic
Acting CEO
Actual events that marked the previous year
such as the global financial crisis, showed that
the strongest economy, at first developed and
stable market can be unpredictable and directly
affected by unforeseeable repercussions that
are progressive, breakneck speed reflect on all
branches of the economy including the securities
market. The key to success of any activity, in our
case, recovery of financial markets lies in the
synergy of all stakeholders who participate in it,
and synchronized activities restore confidence
of domestic and foreign investors. Continued
implementation and further development of
legislation pursuant EU and developed markets
through further tax relief and benefits for
participants in the financial markets, particularly in
the area of fund groups (pension and investment
funds), the constant promotion of the domestic
market as the individual performances, and within
region will choose back investors. The period of
stagnation stock activity should certainly be used
in the further implementation and construction of
corporate culture within the company and market
introduction of new materials, derivatives and
short-term securities, which will be the first and
crucial step in the return of foreign investors in
our market. The period of recovery is not, and
will not be easy and fast, but according to earlier experience, a proven, that after each rain, the
sun again in sight. From this crisis should draw
lessons not to repeat mistakes, and take as long
as possible with a positive balance. The market will
always exist, traders also, long-term or short-term
securities, futures options, swaps, market and
other material.
HISTORY AND DEVELOPMENT FUTURE OUTLOOK The MSE was set up in June 1993 pursuant to the
Act on Money and Capital Markets (1989). The
first founding members were the four Montenegrin
banks: Montenegrobanka a.d. Podgorica,
Pljevaljska banka a.d. Pljevlja, Beranska banka
a.d. Berane, Hipotekarna banka a.d. Podgorica,
and the Republic of Montenegro, i.e. Montenegrin
Agency for Economic Restructuring and Foreign
Investments. Montenegro Stock Exchange Has Big Plans
for the Year Ahead... The Montenegroberza web site will be enriched
by increasing the quality of its reporting in terms
of data necessary for performing the analyses of
investments, particularly in risk management.
During the constitutional meeting held on
7 July 1997, the MSE harmonized its operations
with the Exchange through the exchange
operations and exchange intermediaries Act.
Another three banks and two insurance companies
joined the founding–members of the Exchange:
Podgoriaka banka a.d. Podgorica, Jugobanka a.d.
Podgorica, Niksicka banka a.d. Niksic, Lovcen
osiguranje a.d. Podgorica and Swiss osiguranje
a.d. Podgorica.
In order to increase its capital share, the MSE
issued additional shares, upon the approval of the
Federal Commission for Securities and Financial
Markets. The shares were subscribed and paid for
by several Yugoslav banks, as well as the Federal
Government.
In order to comply with The Law on Securities of the
Republic of Montenegro, the MSE issued a third
issue of shares. The importance of this issue which
was sold successfully with 100% subscription
was instrumental in the further development of the
capital market of Montenegro because with the
sale of this issue 10 new shareholders emerged as
owners of the MSE from banking sector, insurance
companies and private companies from all
spheres of economy. As of today, the MSE has 23
shareholders. The MSE moved to its new premises
in the new business district of the city.
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It aims to raise the level of market liquidity and
to implement a new information system project,
funded by the government of Luxemburg. This is
expected to start soon. The project management
has been entrusted to the Luxemburg stock
exchange, while the technical implementation will
be carried out in cooperation with the Belgrade
Stock Exchange. The system has been designed
in accordance with world standards and functions
in all areas in accordance with MIFID, which is
of crucial importance to Montenegro as future
member of the European Union. Apart from the
implementation of the new system, it is of vital
importance for Montenegro to have the Luxemburg
stock exchange as its partner.
This is just one in a series of projects that
have been planned to take place through this
cooperation. This year’s plan also envisages
the development of a new index in cooperation
with the Vienna stock exchange, with which
Montenegroberza has already worked successfully
over a long period of time. This index will be
calculated and published at the Vienna stock
exchange and will consequently directly expose
companies in the index to monitoring by world
investors.
In addition to this, it has been planned that at least
one Montenegrin company should appear in the
index that includes FEAS countries, and which will
be calculated and published by the world known
index provider Dow Jones. It is also intended to
enrich the market with new material, i.e. derivative
securities, which will expand the range of products
on offer and will refresh the market. Implementation
of the project is planned to take place with
cooperation from European agencies that are
specialized in this segment of the market. The first
foreign listing in the market will also be worked on
through the IPO process.
Montenegro Stock Exchange will continue to
be a locomotive for further development of the
Montenegrian securities market, its promoter, and
active participant of international integration.
Some educational activities are also planned
in order to enrich knowledge regarding the
importance of corporate governance, and to
increase the number of companies that accept the
Corporate Governance Codex in Montenegro. The
corporate governance sector is of vital importance
in joint stock companies and it is directly related to
the stock exchange market as it directly contributes
to the protection of shareholders’ interests. Code of
Corporate Governance for Montenegro was formed
in May 2009, as a result of cooperation between
the Montenegrin Stock Exchange and International
Finance Corporation (IFC).
Testing of a Scorecard methodology in
Montenegro
In cooperation of Montenegroberza and
International Financial Corporation (IFC) within
the project “Promotion of Corporate the testing
of a Scorecard methodology was carried out
in six companies. Montenegroberza supported
Governance in Montenegro” and recommended
this kind of testing to the listed compaies in
Montenegro. The code was accepted by five
listed companies, and not all of them tested the
actual level of application of standards. Six listed
companies agreed to test the actual level of
corporate governance: Plantaze JSC, Zeljeznicka
infrastruktura JSC, Zeljeznicki prevoz JSC,
Montecargo JSC, Pobjeda JSC and Zetatrans JSC.
IFC provided consultations for those companies
free of charge through in-house workshops. Testing
of scorecard methodology gave some results and
highlighted some problems regarding the actual
situation of Corporate Governance in Montenegrin
companies. Scorecard show that the most
problematic areas were: supervision and control,
transparency, and Board of Directors (election of
members).