FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT JUNE 2013
SARAJEVO STOCK EXCHANGE
Cooperation between exchanges gives
cause for optimism despite political and
economical problems.
Tarik Kurbegovic
CEO
Although political and economic instability in
Bosnia Herzegovina continued to negatively
affect the domestic capital market, leading to
drop in market turnover for the first time since
2010, a number of factors give us reason to
be optimistic for the upcoming year. Alhtough
slowly and still hesitant, more and more issuers
discover the potential of the domestic market
for funding their development and growth.
SASE has undertaken additional efforts in
improving the market conditions. Legislative
changes on disclosure requirements that have
HISTORY AND DEVELOPMENT
The Sarajevo Stock Exchange (SASE) was
founded in September of 2001 by eight
brokerage houses and commenced trading
on April 12th of 2002. The SASE is a joint-
stock company and a central marketplace
for securities trading in the Federation of
Bosnia and Herzegovina. The SASE currently
has 11 members, whose headquarters are
spread around the Federation of Bosnia and
Herzegovina, the majority being in the capital,
Sarajevo. Trading on SASE is performed
electronically through an order driven electronic
trading system BTS (Stock Exchange System).
SASX-10 is the main index on the Sarajevo
Stock Exchange. It reflects the price movement
of the top 10 issuers on the Sarajevo Stock
Exchange (excluding investment funds) ranked
by market capitalization and frequency of
trading. In 2009 a segmentation of Free market
was performed, creating four new subsegments
which proved to be helpful for investors’
understanding of the market.
Turnover on SASE has risen substantially, which
can be illustrated by the fact that in 2007 it
rose up to US$ 961.5 million - more than in
2005 and 2006 combined. There were 4 mutual
funds founded in 2007, and more are currently
in preparation. In 2009 as a result of global
financial crisis sharp decrease in turnover
affected SASE where we finished the year with
US$ 153,7 million. The effects of financial crisis
were even more strongly reflected in 2010, so
annual total turnover on SASE was US$ 74,9
million.
passed in 2013 should result in making the
SASE website an one-stop information hub for
all market participants. Other internal efforts
include creation of new platforms for OTC and
repo trades.
Together with our partners and shareholders
from Borsa Istanbul we have started the
process of creating new trading material while
increasing the visibility and relevance of SASE
to the vast pool of Turkish investors. Mutual
trading platform with Banja Luka and Podgorica
stock exchanges is also a project which should
In 2011, the amount of the total turnover was
US$ 165 million, and regarding to 2010, it was
an increase by 125% In 2012, the turnover was
increased by 49% to 247 million, and in 2013 it
decreased back to 170 million, largely because
of lesser amounts of treasury bills and bonds
auctions by the Federation government.
FUTURE OUTLOOK
Last three years represented slow steps on a
road to recovery from 2008-10 crisis, and we
hope 2014 will be the continuation of that trend.
Arrangement with IMF means that government
debt securities auctions constitute smaller
part of overall turnover, but there has been
announcements from government that they
will start to defroze the privatization process of
companies in which state has a minority stake,
which has been expected for a long time.
SASE will keep up the effort to educate the
domestic investors, which still do not participate
enough in trading. There are works in place to
create entirely new money and repo market, as
well as the improvements in SASE website and
rules of trading.
kick-start a new era of cooperation for all the
markets of Southeastern Europe.
We look to 2014 with optimism and renewed
drive in making new steps towards our goal: a
more attractive, while stable capital market in
Federation of Bosnia and Herzegovina.
BOSNIA AND HERZEGOVINA
ECONOMY
Bosnia and Herzegovina’s (BiH) past
economic growth relied increasingly on
domestic demand as the key driver.
Private sector demand expansion was fuelled
by a credit boom financed from abroad. This
produced strong output growth amid a benign
external environment and ample bank financing.
However, the associated vulnerabilities became
clear in the 2009 crisis when capital inflows
came to a stop. Against this backdrop, the
currency board arrangement, fiscal tightening,
and financial support under the 2009 SBA
helped safeguard macroeconomic stability (Box
1). But this has not been enough to propel the
economy forward—staff projects that real GDP
will not regain its 2008 level until 2013.
Structural impediments continue to hamper
economic performance—the large government
crowds out the private sector and the
business environment discourages investment
and business expansion, leading to high
unemployment and low labor force participation.
We will continue to work on the common trading
platform with Banja Luka and Montenegro
exchanges, as well as the projects with Istanbul
Stock Exchange - data vending and creation of
new derivative products.
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